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Why some people will pay more on their energy bills, despite the price cap falling
Energy regulator Ofgem has said the new price cap will reduce the average bill to £1,923 from 1 October, from £2,074 per year.
The average customer with a prepayment meter will see their bills fall to £1,949 per year.
These figures are based on an estimate the typical household uses 2,900 units of electricity and 12,000 units of gas.
On the face of it, it seems that everyone can expect to pay less from October – but a few factors mean that might not be the case.
The energy price cap controls the amount that companies can charge per kilowatt hour of gas and energy – but it doesn’t cap how much customers will end up paying.
The standing charge on energy bills has risen from 74p last winter to 83p this year, adding a little under £3 a month to bills.
Plus, the end of the government’s energy support will mean many end up paying more.
Last winter the typical household would have paid £2,500 per year due to the Government’s Energy Price Guarantee.
But each household’s bill was reduced by between £66 and £67 per month between October and March due to a separate government grant.
Jonny Marshall, an expert at the Resolution Foundation, estimated about one in three households in England, or 7.2 million in total, will face higher bills between October and March.
Most of those affected will be households who consume less gas and electricity than a typical household.
The Resolution Foundation’s analysis suggested that among the poorest tenth of English households, nearly half (47%) would face higher bills this winter.
“The end of the £400 universal payments and rising standing charges mean that over one-in-three families across England will face higher bills this winter than last,” Mr Marshall said.
“With almost three million households set to see their bills rise by over £100 – at a time when inflation is still sky high – the government must up its game in providing longer-term support for hard-pressed families with a new social tariff for energy bills.”
