4. An increase in energy bills
Due to unprecedented increases in the wholesale price of energy, the regulator’s energy price cap is expected to rise by over 50% in April from its current level of £1,277 a year, severely denting people’s finances as bills get more expensive. Analysts from energy consultancy Cornwall Insight, for example, are now predicting the cap will rise by 51%, that’s £1,925/yr for someone on typical use. Other predictions range from 46% to 56%.
What can I do about it?
The best and simplest advice is that MOST people should DO NOTHING:
- There aren’t currently any fixed deals for new customers cheaper than the current price cap on typical use. So if your fix is up for renewal, move onto the standard variable tariff as this is sold at the cost of the price cap – with typical use customers paying £1,277 a year. The market’s cheapest fix right now is around 56% more than the cap – though some with very low or high usage may find it cheaper (do a cheap fix comparison to see). But at that rate, fixing’s unlikely to be worth it.
BUT if you’re offered a fix that’s no more than 40% costlier than the current price cap – don’t be put off:
- Some existing customer deals (especially from Scottish Power and Octopus) may be offered at this rate, so if you’re offered one, do the numbers to see what % the increase is – as it may be worth it in the long-term if the price cap rises by the current prediction above.
Visit our Energy Price Cap guide which explains how the energy price cap works and its current price level.