WHATS IN STORE FOR ENERGY PRICES IN 2022

UK households have been hit with soaring energy bills from April 22

Millions of households are facing two record energy price hikes this year which would lift the average gas and electricity bill to £2,000 per annum from October, intensifying the UK’s cost of living crisis.

As you may already know, the first energy price hike was on Friday 1st April, this was caused by the increase in the energy price cap.

What is the energy price cap?

The energy price cap was first introduced in January 2019, which sets a limit of what energy tariffs can be charged per a year to an average customer, including a maximum daily standing charge to be connected to the national grid. It is designed to protect the consumer against hikes in energy prices and is reviewed by Ofcom every 6 months.

What has happened to energy rates in 2022?

In October 2021, Ofcom announced an energy price increase of 12% and now we have the official rates released for April 2022 we can now see energy prices have increased a massive 54%. It was previously £1277 per year and is now £1971. Which in theory will send the average households energy bill to over £2000 per a year and more if we are to take into consideration the further increase we are expected to have in October 2022 – which is expected to see bills increase a possible 75% from pre-April rates.

The number of households who are in ‘fuel stress’ because they are unable to pay their energy bills is expected to treble overnight to 6.3m across the UK from 1 April, according to research from the Resolution Foundation thinktank.

The research has added to growing calls for ministers to take urgent action to avert a national energy crisis, triggered by a global gas supply crunch, including proposals that the Treasury scraps VAT on energy bills and moves green levies and other policy costs into general taxation

Support is available

Ofgem has put in place a strong safety net to support consumers struggling to pay their bills. If you or your family are in vulnerable circumstances or in debt, there is help available for you and we would advise you to contact your supplier to access it.

If you are on a pre-payment meter, protections include being able to ask your energy supplier for emergency credit.

If you are struggling to pay your bill, contact your energy supplier to explain what you can pay and when – they are bound by Ofgem rules to listen, consider your ability to pay and to act to support you fairly.

Low-income households, especially pensioners, can get a £140 rebate off their energy bill under the Warm Home Discount.  

What’s more, while the price cap limits the amount suppliers can charge customers on their default tariff, most suppliers offer tariffs cheaper than this.

While the price of these fixed contract deals is also increasing on the back of higher wholesale energy prices, if you shop around you may well still be able to save hundreds of pounds on your energy bill.

Be aware that price comparison websites will not factor in the higher default tariff rates until the new price cap level comes into effect on 1 October. So, if you compare deals before then, you should be able to save even more than advertised.

Remember also that switching to a one or two-year fixed deal gives you greater peace of mind because it provides some protection from volatile global fossil fuel prices.

Equally, if you don’t want to switch supplier or you are unable to, contact your supplier who should be able to put you on a better deal and make sure you have access to all the support you are entitled to.

If you choose not to switch and remain on a default deal, the price cap will still save you between £75-£100 a year by ensuring you pay only pay a fair price. It has prevented and will continue to prevent suppliers from charging more than their legitimate costs.

Contact our team for more information:

Office: +44 (0) 203 005 5269

Email: info@mestatesltd.co.uk