This month, energy regulator Ofgem is expected to announce a 10% price hike for users on standard or default tariffs. This follows the 9% increase that took place in Spring. This means 11 million UK billpayers will see an almost 20% increase in their energy bills prices this year alone.
“The increase in energy bill prices this year has been unprecedented,” says Stephen Murray, energy expert at MoneySuperMarket. “This huge step up in prices will take effect from 1st October, just as heating gets switched on around the country and bills are generally higher anyway.”
What the increase in energy bills will cost you
According to MoneySuperMarket, the new price hike will add over £100 to your utility bills. If there are more than two members per household, the hike could be closer to £200. The increase is not completely unexpected, as lockdown restrictions ending means more businesses are back to running full-time and energy usage is increasing.
One way to deal with this is to take action now. “The good news is that there is a very simple way of beating these price hikes: if you’re on a standard variable rate tariff, or if your fixed-rate deal is coming to an end, you can switch your energy supplier to a better deal”, according to Murray.
If you’re on a standard tariff, this won’t be the last price hike on your energy bills either. According to MoneySuperMarket, Ofgem now sets ‘maximum’ prices for customers on standard tariffs every six months. This means you can potentially see another hike by the end of the year.
What you can do to save money on energy bills
According to Citizens Advice, one of the best things you can do to reduce your electric and gas bills is to switch to a new supplier. Suppliers often offer good deals to new customers switching from another company, so this could be your best chance to get a lower tariff.
What options you have available will depend on how you pay your energy bills. For example, if you have a smart meter you need to make sure a new supplier can support this technology. Or if you use a prepayment plan or have a Warm Home Discount, make sure to ask if you will be able to keep this once you switch.
Saving money on energy bills
When it comes to reducing your energy consumption, even the smallest things count. Once the colder weather arrives and your heating is always on, lowering your thermostat by just 1°C can cut your bill by £60 a year. Lower it by 2°C and you’ll be “cancelling” the price hike of £100 that comes into effect soon.
You will also save money if you install a smart thermostat, replace your boiler if yours is old or not working properly, and turn off standby appliances. As much as possible, draught-proof your property by adding adhesive foam strips around windows and door frames. Even doing one or two of these things will reduce your energy bills significantly by the end of the year.
The post Energy bills expected to jump more than 10% in August appeared first on The Motley Fool UK.
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