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Energy bills to rise by £693 from April 2022 – Which? News

You could be one of 22 million people waking up to a higher energy bill come 1 April, owing to today’s announcement that the energy price cap on certain deals is rising by 54% per year.

This comes as cheap energy deals are few and far between and dozens of energy providers have stopped trading over the last six months as the ongoing impact of the energy crisis has taken hold.

It’s not possible to make big savings on your gas and electricity payments right now, but there are several things you can do to limit the impact. Read on to find out more.

Help beat the rising cost of living with our money-saving tips

Will my energy prices rise in April 2022?

The newly announced price cap applies to certain types of energy deals:

  • Standard tariffs
  • Default tariffs
  • Out-of-contract tariffs

These are all more or less the same thing. If you haven’t switched energy supplier or tariff in a while, or took no action when your last fixed deal ended, you’ll be on a default, or variable, tariff and  in line for a price rise this April.

While energy companies don’t have to increase their prices on variable tariffs to match the cap, they typically do. Given the difficult state of the energy market right now, with soaring wholesale prices and company closures, we’re expecting most providers to up their prices.

Prepayment meter tariffs are also covered by the price cap, and these are set to rise £708 from £1,309 to £2,017.

If you’re currently on a fixed deal (one that has a set contract length) then you won’t be affected by the price cap changes for at least the length of that contract.

How much will your gas and electricity bills go up by?

The price cap is not an absolute limit on your bills. Instead, it’s a set cap on your rates, or the amount you pay per unit of electricity or gas that you use, plus the standing rate you pay to have your energy tariff no matter what you use.

That means the exact amount extra you’ll have to pay depends on how much power you use.

As an example, a household that uses a medium amount of gas and electricity (defined as 12,000kWh gas and 2,900kWh electricity per year) can expect their bill to swell by around £693 per year. That’s around £57 extra per month.

The same household paying via prepayment can expect around £708 to be added to their bill per year, or £59 per month.

If you pay when you receive your energy bills, rather than by direct debit, your annual bill could go up by £130 each month.

Why is there an energy price cap?

The price cap was introduced in 2019 to ensure that prices for customers who don’t switch their energy provider or the tariff they are on are fair and reflective of costs. It is a limit on the maximum amount energy suppliers can charge for each unit of gas and electricity a household uses, as well as the maximum daily standing charge – what you pay to have your home connected to the grid.

The price cap is applicable to providers’ standard and default tariffs, so if you’re on a fixed-term energy deal it doesn’t apply to you directly. It is set every six months (in April and October) by the government and calculated by energy regulator Ofgem.

What to do if you can’t pay your energy bills

A £57 per month increase to your bills is hardly a small shift. If you’re worried about your bills, there are a few things you can try:

  • Opt for paperless energy bills and manage your account online (as some firms charge extra for paper bills)
  • Pay by direct debit. You can be charged more – even if you’re protected by the price cap – for paying once you receive a bill or by prepayment
  • Get a smart meter installed or send regular meter readings to make sure your bills are accurate. Find out how to get a smart meter
  • Replace light bulbs with energy-saving alternatives as they’re much cheaper to run
  • Find out if you qualify to get free insulation
  • Check if you’re eligible for the Warm Home Discount, worth £140 per year

Talk to your energy supplier if you can’t afford to pay your bills. They have to treat customers fairly and agree a payment plan with you that you can manage.

Options can include a payment break, payment reduction, additional time to pay, access to hardship funds and to be added to its priority services register (if you are in a vulnerable situation).

Many companies offer emergency credit and friendly credit for customers with prepayment meters too. Find out if a prepayment meter is right for you.

Get more advice from Which? 

Person looking at bills

Lisa Barber, home products and services editor at Which? said:

‘The sheer scale of these energy bill increases will cause real concern and fear for families and households up and down the country where people are already struggling to pay their bills due to the rising cost of living.

‘For those on a fixed-rate tariff, it’s best to stay put as you are unlikely to find a cheaper deal. However, if you’re on an out-of-contract tariff, now that the price cap has been announced, it’s worth keeping an eye out in case better deals become available in the coming weeks.’

Find out more about energy companies or get help cutting your energy bills.

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