The energy price cap is alarming news for households, but for some, it's even more worrying as they may pay over £200 more than others purely due to the method they use to pay bills.
With gas prices 15 times higher this winter than two years ago, according to Ofgem, billpayers in Britain face a difficult winter. Those on standard direct debit tariffs face energy bills - based on normal usage - of the equivalent of £3,549 a year - before another steeper rise in January and possibly April.
But it's the poorest households who are likely to be hardest hit. According to End Fuel Poverty, lower-income households are often on pre-payment or pay-as-you-go energy meters. Those customers, Ofgem has confirmed, face a higher energy cap than those who pay by direct debit. Households who pay on receipt of their bill every three months will be charged even more.
Read more: How long new £3,549 energy cap will last - and when it will rise again
The October 2022 energy cap is higher if you pay by direct debit or cash/cheque every three months
How much you will be charged per unit of energy depends on the method you pay. The final figures are based on standard use, so if you use more or less, you may be charged a different amount.
Households paying by direct debit face an 80% price cap rise from October, up from £1,971 to £3,549 a year, based on average use.
For prepayment customers, the cap rises from £2,017 to £3,608. Those who pay on receipt of the bill every three months - sometimes known as quarterly cash or cheque - face a price cap of £3,764, up from £2,100.
Why are price cap bills higher for pre-payment/pay-as-you-go and on receipt of bill customers?
Ofgem says the price cap is higher for customers who use pre-payment/pay-as-you-go meters or who pay by cash or cheque every three months, due to costs.
Ofgem says : "Customers who pay by standard credit (cash or cheque) pay an additional £215 based on the higher cost for energy companies to serve them. The 24 million households protected by the price cap includes around 4.5 million prepayment meter customers. These customers pay an additional £59 compared to those on direct debit, which also reflects the higher cost for energy companies to serve them."
Read next:
- Energy bills to soar as Ofgem confirms price cap will rise to £3,549
-
Classes must stay open five days a week, says schools minister
-
Food supply fears return due to CO2 shortage as vital factory ceases production
-
Money Saving Expert Martin Lewis issues new advice on fixed-rate energy tariffs
-
The five most expensive appliances in homes that add hundreds to energy bills
