Martin Lewis outlines rise in average UK household energy bills
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Recent forecasts from Cornwall Insight have predicted that Ofgem’s price cap could reach above £4,266 a year for gas and electricity from January 2023. Other forecasts are predicting the price cap to rise above £5,000. The current price cap sits at £1,971 and is a limit on the rates a supplier can charge for each unit price of electricity and gas a person uses. It was increased in April in response to the rising cost of wholesale gas which saw around 30 energy companies go bust between August last year and now.
Soaring living costs and inflation rates at a 40-year high have left millions of households in the UK struggling to afford their monthly bills.
The news of further increases in energy costs has worried thousands more as until the confirmation from Ofgem, the UK has no certainty of how high costs could go.
Express.co.uk has created an energy bill calculator to work out how much a person’s gas and electricity cost could rise by.
The energy calculator is an estimation based on the predictions from Cornwall Insight from August 9, and can offer a “roundabout” figure that people can use to try and plan their finances.
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People only need to enter the direct debit amount that they are paying now and it will show how much it may increase for October and January.
However, there are lots of variables which can affect a person’s energy bills as those who use more energy will inevitably have higher bills than those who use less.
If a person has built up credit on their energy bills over the summer months, then this will be taken into account and the direct debits may be less.
Anyone on a standard variable rate tariff will be on the price cap and at the moment, this is around 24 million homes.
People will be on a standard variable rate if they haven’t fixed into an energy deal.
Last week the Government sat down with energy bosses from the UK’s largest supplier to discuss what could be done to support the public and the providers during the energy crisis.
However, no new support was announced with Prime Minister Boris Johnson stating that the Government would continue “urging the electricity sector” to work on ways that they can ease the cost of living pressures.
Chancellor Nadhim Zahawi stated there were going to be options to provide additional help to people to ease the cost of living pressures will be “ready to go” on 5 September when the new Prime Minister takes office.
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The former Chancellor who is running for the top spot said on Thursday last week that he would find up to £10billion to help with the cost of rising bills through cuts to Whitehall spending.
He also announced that he would reduce VAT on energy which would be a saving of around £200 for households, he also said he would be “willing” to borrow to fund the support as a “last resort”.
Foreign Secretary Liz Truss has stated that tax cuts will be the way to tackle the crisis however has not specifically announced a plan as of yet.
The Government announced earlier this year that it was going to give all UK households an energy grant of £400 to help cover costs.
The first payment will be distributed from October 2022 and then spread over six months.
In October and November, energy suppliers will discount £66 from household energy bills. This will then rise to £67 a month from December to March 2023.
The way people will receive the grant will depend on how they pay for their energy.
Direct debit and credit customers paying either monthly or quarterly will automatically have the money credited to their account.
Those with “smart” pre-payment meters will also see the grant automatically added to their account.
Those using traditional or “non-smart” pre-payment devices will instead receive a discount voucher in the first week of each month, either via text, email or in the post.
Homeowners will then need to redeem these in person at their usual top-up point.
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