Over the last few months, households have been concerned about the rising energy cost, with gas and electricity doubling in price. The current cap is £1,971, but it was announced that from October 1st, this would rise to £3,549. The Government announced a £400 Bill Support Scheme to help households with rising bills throughout the winter, but it was felt this wasn’t enough.
Around 24 million households were set to face the new price cap – with another rise in January making it 52% higher than the October price cap. However, Liz Truss, the new Prime Minister, has announced that the cap has now been reduced to £2,500, which is what it will remain at for two years. This means that the average household will save around £1,000 a year.
The £2,500 figure is an average based on typical use – so if you use more energy than the average home, you will pay more. You might also pay more if you are on a repayment metre or pay for your energy by cheque or cash.
Wholesale energy prices are still rising, so this price cap means that the government is borrowing money to help energy companies cover the difference between what they pay for the energy they sell and what they are charging households. Later this month, the new Chancellor will announce how the freeze will be funded.
Although the price cap of £2,500 is good news, this is still 23% more than the current level. However, with the £400 payment, our bills won’t be too much more than this.
If you have fixed your energy price and believe you might pay more now that the energy bill freeze has been announced, it’s advisable to talk to your supplier, as you may be able to cancel.
If you are worried about your energy bill this winter, there are several things you can do now:
Make sure you block any drafts on your windows and doors
Check with your council if you are eligible for cavity wall insulation and a boiler upgrade using a government grant
Make sure you only heat your water on a timer
Replace traditional bulbs with LED bulbs which are more energy efficient
Turn off lights when you leave a room
Completely switch off appliances that are usually left on standby
Don’t overfill your kettle
Wait until you have a full load to use your washing machine or dishwasher
Avoid using the tumble dryer
Replace your shower head with an energy-efficient one
