Millions of people across the UK are facing financial difficulty after an 80% increase in the energy price cap was announced on Friday. Government regulator Ofgem has confirmed the average yearly bill will go from £1,971 to £3,549 from October for around 24m households in England, Scotland, and Wales on default energy tariffs.
The news prompted MoneySavingExpert Martin Lewis to warn "lives will be lost this winter" as a result of the increase which he branded a "catastrophe." You can read what he said in his interview on the Today programme here.
Experts and analysts have already warned of the difficulties many households will face as a result of the change. Ofgem CEO Jonathan Chorley said there was existing government support available but that the upcoming new prime minister "will need to act further to tackle the impact of the price rises that are coming in October and next year". A study by the University of York has also predicted that 45m people in Britain could face fuel poverty this winter.
Here is what the major energy companies have said so far about the changes to the price cap.
Read more: Energy bills to soar as major Ofgem price cap rise announced
British Gas
One of the UK's six major energy companies, British Gas has already confirmed it will "reluctantly" have to raise its price as a result of the price cap. On its website it said: "The energy industry regulator, Ofgem, is increasing the price cap because of the tough energy market right now. It costs us a lot more than it did a year ago to buy the energy that we supply to you and this means that we reluctantly have to raise our prices. This is the same for the customers of all of the energy providers."
If you’re currently on a fixed-rate tariff those prices will stay the same until your tariff period comes to an end. British Gas has already announced its new rates from October 1, which you can read about here. It also confirmed it would, like other energy companies, be giving customers £400 off their energy bills in six instalments from October. For those paying by direct debit this will be a monthly discount whereas your discount will be applied to your account balance each month if you pay by cash or cheque. If you have a smart prepayment meter your discount will be applied to your meter each month just like a top-up. If you have a traditional prepayment meter you’ll get your discount via vouchers, which you can then cash in when you top up in your normal way. Read more about the £400 energy discount in the UK here.
British Gas has already promised to give 10% of profits to cash-strapped households in a bid to ease the crisis. You can also apply to the company for £1,500 off your energy bills, even if you're not a British Gas customer. You can read more about that here.
EDF Energy
EDF Energy has said it is currently unable to offer any fixed tariff deals due to the increases in the price cap and that it would be contacting all customers on standard (variable) tariffs in the next couple of weeks. But it has urged people not to cancel their direct debit payments or ignore their bills, saying it could cost you more in the long term and harm your credit rating.
It said: "Unfortunately the price cap is increasing on October 1. We understand that this increase will put a strain on our customers. We can’t control the global energy crisis but we’ll do all we can to help you get through it. We'll be contacting all of our customers who are on standard (variable) tariffs in the next couple of weeks."
EDF also said customers worried about affording their bills could get support through the company's customer support fund as well as considering installing a smart meter or paying bills more regularly. You can read everything about bills if you're an EDF customer here. The company also confirmed it would be rolling out the £400 discount via automatic discounts, credit, or vouchers depending on how you pay your bills. Like other companies whether you get your reduction as a discount, credit, or voucher will depend on whether you pay by direct debit, cash/cheque, smart pay-as-you-go, or prepayment.
E.ON Next
E.ON Next said: "Ofgem has announced that from October 1, 2022, the price cap for customers on a standard variable tariff will increase to £3,549 if they pay by direct debit and to £3,764 if they pay any other way. For customers with a prepayment meter the price cap will increase to £3,608.
"This only affects customers on a standard variable tariff. The price cap does not apply to you until the end of your contract if you’re on a fixed energy tariff." E.ON will also be applying the £400 towards energy bills – you'll see a discount of £66 applied to your energy bills in October and November and £67 a month from December to March 2023. Again how you get it will vary depending on how you pay. Read more about their support offerings here.
Ovo Energy
Ovo Energy confirmed the changes were likely to impact the "majority" of customers and that as an energy company it would not be able to absorb the higher costs. "Over the past 12 months it cost around £37bn to power and heat all UK homes. From October 2022 it is forecast to cost around £111bn per year," it said on its website.
"Because we’re an energy supplier, not one of the fossil fuel producers who are making the large profits, we aren’t able to absorb these costs. Unfortunately we can’t solve this problem on our own and that’s why we’re working with the government and with the industry on a solution."
Ovo said it would be contacting customers between September 5 and 16 to explain how the changes will affect them. It said it would soon be launching its support package which could offer direct debit relief and payment holidays for customers as well as free and subsidised products and services. It will also be rolling out the government's £400 discount scheme. You can find out more about its support here.
SSE
SSE, which was bought by Ovo in 2020 but still operates under the SSE banner, said customers would be covered by Ovo's support scheme which it launches soon as well as giving customers the £400 discount like other companies. It said: "Global supply shortages and the end of lockdowns caused initial increases in wholesale energy prices. But energy bills are now skyrocketing because of Putin’s invasion of Ukraine. The war has caused gas and electricity prices to surge to unprecedented levels. And they’re likely to continue rising in the coming months as the war continues. "Unfortunately in October these wholesale price rises will impact the price the majority of customers pay for energy." You can read more about SSE's support for customers here. To get the latest money news straight to your inbox subscribe to our dedicated newsletter here.
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