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What to do if you’re worried about your energy bills rising

Energy regulator Ofgem raised its energy price cap to £1,277 on October 1 (except in Northern Ireland), which means your energy bill could rise by an average of £139 a year or £153 if you’re on a pre-payment meter. Find out how this might affect your gas and electricity bill and what you can do to help keep your energy costs down. 

Why are energy prices rising?

The price rise has been caused by an increase in wholesale gas prices (the amount that energy firms pay), which have seen a steep rise since Ofgem last updated the price cap in December 2020. Gas prices have hit a record high as the world emerges from lockdown at the same time as other economic factors having an impact.

This means that changes in wholesale prices are passed on to households through rising energy bills.

The energy price cap only affects you if you live in England, Wales or Scotland. 

In Northern Ireland, energy prices are governed by the Utility Regulator. You can find out more about the help available with paying your energy bills on the Consumer Council website.

Will my energy bill go up?

If you’re on a default or standard variable tariff you’re likely to see your bill rise by an average of £139 a year and £153 if you’re on a pre-payment meter.  If you're on a fixed deal your bills won't go up until the fixed deal ends.

Can I get a cheaper deal?

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It’s worth calling your current supplier to ask for a better deal. For example, find out if you can opt for paperless billings or move to a cheaper tariff. These simple steps might lead to big savings.

Ordinarily, a fixed rate tariff can be good for the below reasons. But now, with energy prices so high, there are no cheap fixed deals available for new customers. This means it’ll probably be cheaper for you to stay on the standard variable rate because prices for the average customer will be capped to £1,277 per year (£1,309 if you're on a prepayment meter).  

If you're already on a fixed rate deal, you will automatically be moved onto the standard variable rate when your deal comes to an end. 

Below are some of the reasons why a fixed rate tariff can be good:

  • you know how much you can expect to pay over the time period the tariff lasts (for example, two years) so it will help you with household budgeting. Getting a fixed tariff doesn’t mean your energy bills will stay the same, regardless of how much energy you use. You’ll pay the same rate per unit. But if you use more units, your bill will be higher.
  • it will protect you if prices rise again during the term of your fixed deal.
  • in the unlikely event that prices go down you can usually leave the tariff for a small exit fee (sometimes even for free) and switch to a cheaper deal.

If you're on a standard variable tariff, you can also use comparison sites to see if you can get a cheaper deal elsewhere. Switching energy providers might seem like a hassle but it's simple to change supplier and save money.

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Struggling to pay your bill? Contact your energy supplier

Falling behind on your energy bills can be extremely stressful. If you’re struggling to make your next bill payments or to find money to top up your meter, contact your energy supplier as soon as possible.

Your supplier must help you come up with a solution and come up with a payment plan that works for you both.

There’s extra support available if you’re vulnerable. For example, if you have health needs, a disability, are pregnant, have small children or have reached state pension age.

Your supplier can also tell you about grants and charities that might be able to support you as well. 

If you’ve already missed more than one payment on your energy bill or you’re going without heating or lighting because you have no money to top up your meter, now’s the time to get debt advice. 

A debt adviser will be able find a debt solution that’s best for you and to signpost you to information about charitable grants and hardship funds to support people struggling with energy bills, so it’s worth getting in touch with them to see if you qualify.

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What happens if my energy supplier goes bust?

If your energy supplier has stopped trading, it’s important to sit tight, don’t switch and wait until your new provider contacts you. Your new supplier will be chosen by Ofgem, which can take several weeks.

If you’re already in the process of switching, your switch will still go through.

Make sure you take a meter reading so that you’re ready for when your new supplier contacts you.

It’s also worth keeping old energy bills and waiting until your new supplier is appointed before cancelling any direct debits. 

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What if I owe money or am in credit and my supplier goes bust?

Any credit on your account will be protected. The balance is transferred to your new supplier, who will pay you any outstanding credit – minus any energy you have used but not been billed for.

It’s important you don’t switch tariff or supplier until your account is moved to the new supplier. You might find it harder to get any money you’re owed if you switch before this happens.

If you owe money and your supplier goes bust, your debt will be transferred to the new provider and you’ll still have to pay.

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What if my fixed deal is coming to an end after the price cap increases?

When your fixed plan ends, your supplier will put you on their standard variable tariff. This tariff is typically their most expensive deal.

It’s likely your supplier will offer you another fixed deal before this, but this is a good time to compare all your options and consider whether you’d be better off switching to another supplier.

If you're near the end of a fixed plan, you won't have to pay a fee to leave it and move to a new tariff – provided your switch completes within the last 49 days of your current deal.

Should I lock myself in to a fixed rate deal?

Think about your current financial situation and consider how often you’ll have the time to compare the energy market for better deals.

If a fixed plan isn’t your cheapest option, think about whether you’d prefer to pay slightly more to guarantee your energy costs won’t go up during a specific time period, which can help you budget.

Is it better to go for a dual fuel tariff or have separate electricity and gas contracts?

A dual fuel tariff simply means you get both your gas and electricity from the same energy supplier. 

Many fixed, online and standard tariffs will offer a dual fuel option.

Many dual fuel tariffs also offer a discount for taking both gas and electricity from the same company.

It can be more convenient to deal with one supplier than go with two separate suppliers for gas and electricity. Sometimes it can work out cheaper but it’s not always the  cheapest option – it's best to shop around and compare tariffs to find the right one for you.

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How can I save money on my energy bills?

Simple things like making sure you unplug phone chargers, not leaving things on standby and using energy efficient light bulbs are the first steps. Remember, if you use more, you’ll pay more.

You can also improve the energy efficiency of your home with double glazing and insulation.

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