What does the energy price cap mean for us?
What is happening?
The Energy price cap was introduced in January 2019 by Ofgem, the energy regulator. It was intended to cap the price that energy companies could charge for their standard or default energy tariffs which had usually been their most expensive tariffs. It did this by setting a maximum rate that suppliers could charge per unit of gas or electricity.
Now Ofgem has announced that from October 1st this cap will rise by 80%.
An average family home currently pays £1,971 for energy for the year. This will now rise to a new average of £3,549, which is an increase of £1,578 or £131.50 a month.
Why is this happening?
The wholesale gas price has been rising steadily and is now the highest it has been in years. Here in the UK we are particularly exposed as we are such a large consumer of imported natural gas. But in recent months, the sharp rise in gas is due to the conflict in Ukraine, which has reduced supplies of Russian gas.
What can I do, and what help can I get?
Additional funding was announced earlier in the year to support households with these increasing energy bills.
Here is a summary of what has been offered so far;
- A £400 discount on electricity bills that all households will receive. This automatic, non-repayable discount will be applied in six instalments between October 2022 and March 2023 to help households through winter.
- A £650 "Cost of Living Payment" is being paid in two instalments to households on means tested benefits.
- A £150 "Disability Cost of Living Payment" is being paid in autumn to anyone who receives certain disability benefits.
- The Winter Fuel Payment is between £250-£600. You should get it automatically if you get the State Pension. (For this year it has been increased by £300 to include a Pensioner Cost of Living Payment)
- The Warm Home Discount is £140 off your electricity bills if you get the Guarantee Credit element of Pension Credit, and to some low-income households.
- Cold Weather Payment is £25 for each seven days between November and April that it’s below 0°C.
Discretionary energy rebate of £150 - households receiving certain benefits can now apply for a £150 discretionary energy rebate after the scheme was opened up to more residents.
To see the full list of government support available please visit the website here.
Alternatively, you can also visit Ofgem’s website for more tips here.
Of course, it's always good to look at ways to use less energy and we have some good tips here on how to cut your energy use.
Investing in your home’s energy efficiency
In the long term, getting your home retrofitted to become more carbon neutral and reduce your footprint is something to consider. The Petersfield Area SuperHomes project can help you make changes to your home to reduce your bills and make your home more energy efficient while still remaining warm and comfortable to live in.
PeCAN’s Whole House Retrofit Plan is an independent review of you, your home and budget to help you understand what changes to your home are right for you and what grants might be available.
Click here to find out more.