Higher utility prices are here.
On 1st October, the energy price most households pay for gas and electricity increased by just under 10% as announced by the energy regulator Ofgem. The latest 3 month update to the Energy Price Cap reflects the latest adjustments in the energy market.
With another increase anticipated on 1st Jan, further cost misery is potentially around the corner.
The Energy Price Cap, set by Ofgem, is designed to protect consumers by capping the maximum price that energy suppliers can charge per unit of gas and electricity. This cap affects around 28 million households in England, Wales, and Scotland, and is updated every three months.
Key Points on the Latest Energy Price Cap:
1.New Energy Price Cap Rates
Effective Dates: 1 October to 31 December.
Gas Price Cap: 6.24p per kilowatt hour (kWh) - up 13% from 5.48p
Electricity Price Cap: 24.50p per kWh - up 9% from 22.36p
Average standing charges and unit rates if you pay by Direct Debit
| NEW Energy Price Cap rates from 1 Oct to 31 December 2024 | Current Energy Price Cap rates from 1 July to 30 September 2024 | |
|---|---|---|
| Gas | Unit rate 6.24 per kilowatt hour (kWh) Standing charge: 31.66p per day | Unit rate 5.48 per kilowatt hour (kWh) Standing charge: 31.41p per day |
| Electricity | Unit rate 24.50p per kWh Standing charge: 60.99p per day | Unit rate 22.36p per kWh Standing charge: 60.12p per day |
Rates and standing charges are averages, which vary by region. Assumes payments by Direct Debit and includes VAT (at 5%). For those who pay each month after getting a bill, it's 6% higher.
2.Impact on Annual Bills
Typical Annual Bill: A household paying by direct debit will have an annual bill of £1,717, which is a £149 increase from the previous period (July to September).
Cash or Cheque Payments: Households paying every three months by cash or cheque will have a higher annual bill of £1,829.
Prepayment Meters: Households using prepayment meters will see a typical annual bill of £1,669.
3.Standing Charges:
These have edged up slightly for both electricity and for gas although the actual amount paid does vary by region.
This means you would pay nearly £1/day even if you didn’t use any electricity or gas.
4.Support for Vulnerable Customers:
All energy suppliers, under Government rules, need to provide support for certain customers such as the elderly, vulnerable and those in fuel poverty. If you think you might qualify for support you should contact your energy supplier.
There may also be additional support you qualify for, and more information can be found at Citizens Advice.
A cap on standing charges and unit rates - not a cap on your bill
It's very important to note that there is no maximum bill, so the more you use, the more you will pay. The caps relate to the maximum you can be charged for each unit of gas or electricity.
The overall costs shown are based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity annually and this is what the average bill above is based upon.
Considerations for Fixed-Price Deals
If you are on a variable tariff from your energy supplier and therefore subject to the Energy Cap there are cheaper options available.
A range of fixed rates are available that are priced lower than the current Energy Cap and may be worth considering if you wish to lower your bill - some tariffs will also allow you to switch for free should prices fall.
Both uSwitch & MoneySavingExpert offer a comparison option given changing suppliers or tariffs could save you money. You may also wish to speak to your current supplier to see if they can offer you a better deal.
Summary
Whilst the Energy Cap jumped 10% earlier this month, it isn’t too late to change your tariff and reduce your bills especially as usage will increase over the winter months - fixing your costs may be something worth considering too.