Ofgem has released an update regarding the energy price cap. It has been announced that energy bills will be rising a further 80% from the 1st of October. This means that the average household energy bill in the UK will be £3,546.
What is the energy price cap?
The energy price cap relates to the maximum amount that an energy firm can charge. The aim of the price cap is to stop energy companies charging extortionate prices for their energy. However, the wholesale price of gas has increased over the last year due to the Covid pandemic and more recently in relation to the war in Ukraine. As the price cap rises, so do bills. Energy bills are set to increase to £3,546 on the 1st of October, and even higher in January.
What happens if I can’t pay my energy bills?
As energy bills up and down the country increase, many households are struggling to keep up with bill payments. It has been estimated in a recent study that almost two thirds of households will be in fuel poverty because of the new price increases by January 2023. You can cut down your energy bills using energy saving tips but if your bills are becoming too much to handle you must talk to your provider. Many energy providers can offer payment deals to suit both parties.
Should I stop paying my energy bills?
An online campaign has been circulating recently that is encouraging people to stop paying their energy bills all together, in a way of protest against the rising prices. This has been warned against by professionals as refusing to pay your energy bills can land you in a worse financial state than before. Your credit rating can be severely damaged if you refuse to pay your bills, making it difficult to get mortgages, loans or other financial support in the future.
Will fixing my energy bills help?
Fixing your energy bills has, in the past, been an easy way to save money. Now however, it may not be such a great option. Read more about fixing your energy bills here.
Support available for the rising energy bills
If you are struggling to make payments, there is help available. As previously mentioned, if you are unable to pay your bills you must contact your provider to arrange an alternative payment plan.
The UK Government has also announced a financial support scheme. Households will be receiving £400 off their energy bills from October. The grant will not need to be paid off and will be distributed over 6 months.
If you are already in debt due to the rising energy bills, we can help. We offer free, no-obligation debt advice completely online (meaning no phone calls or face to face meetings). Access our free debt advice tool here.