Warning on energy bills: Ofgem is poised to raise the price cap this week; how will you manage as expenses rise?
ENERGY prices recently touched a two-year high, increasing by £180 in the last year and putting a strain on already-strapped households. Unfortunately, on Friday, homeowners will be hit with a new shock when the energy price cap is raised, causing winter fuel costs to skyrocket.
According to campaigners, the energy price cap could be raised this week, putting more strain on hard-pressed people already trying to pay their bills and dealing with the effects of the coronavirus.
The energy regulator in the United Kingdom, Ofgem, has already raised the price cap this year, with an increase of £96 to £1,138 announced in April, affecting 11 million default tariff consumers.
Once it takes effect on October 1, a further hike may send prices up to £1,250 for a typical dual-fuel client.
Millions fear that a monthly increase of more than £10 will push them into debt, with one in every five people already struggling to pay their payments.
Energy suppliers have already cut savings available to families switching energy suppliers by £180 since the beginning of July 2020, according to Comparethemarket.com, as the new price cap level is projected to rise for millions of households.
This rise comes as the cost of energy contracts has risen to its highest level in over two years.
According to comparethemarket.com’s data, the average price for one of the cheapest plans on the market is currently £996, the highest level since February 2019.
The price cap, which was implemented in 2019 to prevent carriers from overcharging households who do not move every year, is expected to increase in the UK.
This is owing to rising wholesale energy prices, as well as the COVID-19 epidemic.
The increase could not come at a worse time for families with children, according to separate research from comparethemarket.com, which found that nearly one-third of families with children at home (28%) struggled to pay their bills in the previous week, compared to 15% of those without children.
“Another hike to the energy price cap will see energy costs soar up for millions of households,” said Alex Hasty, an energy expert at comparethemarket.com.
“While suppliers have been raising rates across the board, switching to a competitive tariff is still much less expensive.
“It should serve as a valuable reminder that the price cap is not intended to shield consumers from large price rises, and that consumers should be aware of this.”Brinkwire Summary News”.