Households across the UK will face a 10% increase in their energy bills as Ofgem raises its price cap.
What is the energy price cap?
The energy price cap is a maximum limit on the amount energy companies can charge their customers on standard tariffs.
Ofgem updates the cap every three months in response to changes in wholesale energy prices. The latest adjustment took place on 1st July.
Price cap changes in October
The average annual dual-fuel energy bill will rise to £1,717, an increase of £149 from the current level of £1,568 that has been in effect since 1 July.
While bills will be about £117 lower than this time last year, analysts anticipate another price rise in January. To address the impact on vulnerable households, Energy Consumer Minister Miatta Fahnbulleh has scheduled a meeting with energy suppliers on 28 August to discuss ways to offer additional support to those in need.
Work and Pensions Secretary Liz Kendall has also extended the £500m Household Support Fund so it will now run until March next year.
Should I fix my energy prices?
With fixed-rate tariffs, unit rates and standing charges do not change during the contract period. You will pay a fixed amount for the length of your deal, protected from fluctuations in energy prices, but it also means you won’t benefit if prices fall.
However, if prices are predicted to increase, it may be a good time to fix your energy deal. Octopus Energy has recently told millions of its customers: “We don’t know exactly what energy prices will do in January and beyond, but most analysts predict the price cap will hover above £1,700 for the next 12 months.”
Are there any good deals?
Currently, Octopus offers a 15-month fixed tariff at £1,656 per year for a typical home, with no exit fees. This means if energy prices decrease after October, customers can simply choose another tariff online.
How your bills will change starting October
We have put together a calculator for you to estimate your energy bills under the October energy cap. Simply select a household size and we’ll estimate your usage for you, or enter your usage to know how much your energy bills will be.
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