Energy payments are rising for hundreds of thousands of households as we speak – how a lot you will pay

Many are declaring the new month ‘awful April’ as the price cap is going up by 6.4% – but your bill is still based on how much gas and electricity you actually use

From today, millions of households will face another hike in their energy bills as the new Ofgem price cap takes effect. The price cap is set to increase by 6.4%, but remember, your bill is still determined by your actual gas and electricity consumption.

For the average dual fuel household paying via direct debit, annual energy costs are expected to jump from £1,738 to £1,849 starting April. This equates to a yearly rise of £111, or an additional £9.25 per month. To calculate your potential increase, every £100 spent on gas and electricity will approximately climb to £106.40.

This marks the third surge in energy bills in recent times, following a 10% rise in October and a further 1.2% increase in January. The price cap doesn’t restrict the total amount you can pay for energy.

Instead, it sets the maximum unit price for gas and electricity, along with the maximum daily standing charge – a fixed fee for grid connection, reports the Mirror.

The cap applies to standard variable rate (SVR) tariffs, typically those where you haven’t opted for a specific energy deal. Approximately 22 million homes are currently under the price cap’s purview.

Ofgem determines its price cap figure based on the estimated average annual energy usage of a household.

According to Ofgem, the average household consumes 2,700 kWh of electricity and 11,500 kWh of gas annually. Despite the price cap figure representing an annual bill, Ofgem revises its price cap every quarter.

Therefore, the new rates will stay in effect until June 30, when they will be reassessed. This tri-monthly update allows Ofgem to account for fluctuating wholesale costs.

For households paying via direct debit, the average gas unit rate is set to increase from 6.34p per kilowatt hour (kWh) to 6.99p per kWh, while the standing charge will rise from 31.65p a day to 32.67p. The average electricity unit rate will also see a hike, going up from 24.86p per kWh to 27.03p per kWh.

However, the standing charge for electricity will drop from 60.97p a day to 53.80p a day.

Different unit rates apply to prepayment customers and those who pay upon receipt of bills. The price cap for individuals using a pre-payment meter will jump from £1,690 a year to £1,803, and the annual charge for those who pay upon receiving their bill will climb from £1,851 to £1,969.

Unit rate prices can vary by region, which can also impact your energy bill. Use our energy bill calculator below to see how your bill will alter from tomorrow.

How to cut your energy bill

The most affordable energy fixes currently on the market are approximately 7% below the existing January price cap, and a significant 14% under the April price cap. Hence, experts are urging consumers to hop online and compare deals pronto.

The MoneySavingExpert.com Cheap Energy Club is a handy tool for finding the best fixes tailored to your needs.

It’s also a smart move to give your home a once-over to ensure it’s as energy-efficient as it can be. This includes checking insulation levels in your loft and walls, and hunting for draughts around windows and doors.

Upgrading to energy-efficient appliances and lighting could be another savvy step

With summer on the horizon, many households will be switching off their heating, leading to savings over the coming months. However, it’s still worth doing a quick audit of your current electricity and gas usage to see if there are any simple tweaks you can make to reduce consumption.

If you’re finding it tough to foot your energy bill, get in touch with your supplier sooner rather than later to explore what options you have. Ignoring your energy bill can lead to serious financial repercussions, including a hit to your credit score, potential court action, and even visits from debt collectors.

Most energy companies provide energy grants to their customers. The specific eligibility criteria differ – for instance, some stipulate that you need to be receiving certain benefits – and typically, you should have consulted a debt advisor initially.

You can discover what assistance is on offer, who qualifies for it, and how you can obtain it via your supplier’s website.

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