Millions of Households Face Rising Energy Bills in the New Year
Get ready for a blow to your wallet as energy prices are set to rise by £94 for millions of households starting January 1. The energy regulator, Ofgem, has confirmed a new price cap, increasing the average annual bill from £1,834 to £1,928.
Take a Meter Reading Before Midnight on December 31
Don't get caught off guard! To avoid being overcharged, it is crucial that households take a meter reading before midnight on December 31. By providing an updated meter reading, you can ensure that your bill accurately reflects your usage and avoid any billing disputes with your provider.
Understanding the Energy Price Cap
The energy price cap sets a limit on the maximum amount suppliers can charge for each unit of gas and electricity. It's important to note that the cap does not limit how much you can be charged based on your energy usage. If you consume more energy, you will pay more.
How Gas and Electricity Rates Are Changing
Currently, a typical household pays the following rates:
- Gas: 6.89p per kWh
- Electricity: 27.35p per kWh
- Electricity standing charge: 53.37p per day
- Gas standing charge: 29.62p per day
Starting January 1, Ofgem will introduce the following new rates:
- Gas: 7.42p per kWh
- Electricity: 28.62p per kWh
- Electricity standing charge: 29.60p per day
- Gas standing charge: 53.35p per day
Calculating Your Bill
To calculate your bill, you will need to know your unit rate for gas and electricity, as well as the standing charge for each fuel type. These details can usually be found on your bill.
Once you have this information, multiply your energy usage in kWh by the unit rate cost to determine your usage costs. Then, multiply each standing charge by 365 and add this figure to your usage costs to get your annual costs. Finally, divide this figure by 12 to find out how much you should expect to pay each month starting January 1.
Changes for Prepayment Meter Households
Prepayment meter households currently pay:
- Gas: 6.67p per kWh
- Electricity: 26.92p per kWh
- Electricity standing charge: 34.20p per day
- Gas standing charge: 55.52p per day
Starting January 1, prepayment meter customers will pay:
- Gas: 7.24p per kWh
- Electricity: 28.17p per kWh
- Electricity standing charge: 33.32p per day
- Gas standing charge: 55.53p per day
Don't Forget Non-Direct Debit or Prepayment Customers
Customers who don't pay by direct debit or prepayment meter and instead pay on receipt of their bill will have slightly different rates. It's important to note that there's a separate unit rate and standing charge cap for this payment method.
More Frequent Reviews by Ofgem
Previously, Ofgem reviewed the price cap every six months. However, since August last year, they have increased the frequency to every three months to ensure fair pricing for consumers.
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