Will the reduction in the energy price cap benefit us?
Last month Ofgem announced that the energy price cap will fall by 7% to £1,568 per year for typical dual fuel customers. While this is good news, this article examines whether this reduction will actually be of a benefit for consumers.
The Effect of the Energy Price Cap
A reduction in the energy price cap is good news for consumers as it means that energy bills will be the lowest they have been in two years. While price cuts are welcomed, it only goes some way towards helping to afford energy bills, as they are still an average of £400 more than they were before the energy crisis began 3 years ago. What is more, the reduction in the energy price cap is predicted to be short lived. According to Cornwall Insight, the energy price cap is likely to rise to £1,574.37 and remain into the new year.
To find out more about how the energy price cap works, click here.
When the price cuts happening over the summer average out with possible increases in the winter, reductions in the price cap may show little benefit on bills for those who need the help most. According to End Fuel Poverty Coalition, Fuel Poverty has increased by an estimated 36.4% since the cost-of-living crisis in October 2022. Therefore, households that have been pushed into debt as a result of the energy crisis will still have repayments to make. This highlights the impact of fuel poverty and the challenge for millions of households across the UK.
Naturally, as a result, some households have resorted to turning their heating off to try and avoid insurmountable bills. This is NOT advised. The consequences of cold living conditions can have a significant impact on health with conditions that are made worse by the cold. Furthermore, households that do not consume energy will not be able to escape energy bills as they will still receive a bill for the standing charge.
Instead, it is advised that you talk to your energy supplier who will be able to support you.
Standing charge
Everyone using gas and/or electricity is required to pay a standing charge. The standing charge is a cost that is automatically included in electricity and gas bills. The cost can vary due to regional differences and suppliers. You will be charged this cost each day even if you do not use any energy on that day.
What can I do?
If you don’t already have an energy monitor, you might find them beneficial as they will show you the impact of turning a particular light or appliance on or off. By seeing the effect of the appliances in your home and the energy they use, you will be able to gauge which ones to use sparingly to cut fuel costs.
For more information on energy monitors and smart meters, click here.
If you are finding it difficult to manage your energy bills, call us on 0115 985 9057. We will see what support is available to help maximise your income and make bills more affordable.
If you have already contacted us, click here for more information on how to manage your bills.