Energy price cap limit announced

In response to a growing campaign from UK charities and anti-poverty groups about rising energy costs, the government has announced a new energy price cap from 1st October.

The new cap will limit a typical household energy bill to £2,500 for 2 winters, significantly below the planned October rise to £3,549. In addition to the new price cap, October will also see the start of a previously announced government support measure, which will give all electricity customers £400 over a 6 month period. People on pre-payment meters will have this paid on their account or through vouchers.

This cap does not mean however that everyone will pay £2,500 per year. It depends on how much energy a household uses each day. If a household uses less than average, then it will pay less and of course the more a household uses, the more it will pay. The cap limits the amount per unit (kWh) that a supplier can charge its consumers. For helpful hints and tips on becoming more energy efficient, please take a look at the Simple Energy Advice website.

The cap is based on an average household consumption each year. An average household is assessed to use 12,000 kilowatt hours (kWh) of gas and 2,900 kWh of electricity.

Talking about the energy costs crisis, David Rodger, CEO of Debt Advice Foundation said “The limit will be a welcome relief for many, but for a large portion of the country, the price cap remains at a unaffordable level. In times like this it is important people reach out for help directly with their energy provider and look at affordable payment plans if one is viable. Under Ofgem rules, a supplier must offer a payment plan to repay arrears that is affordable. Often, doing the simple things like a benefit check through Turn2Us can help maximise income. You can also provide your supplier with regular meter readings or ask them for a smart meter to be installed. This will enable your supplier to bill you for the energy you use, rather than rely on estimates. Ask your energy provider about grants or trust funds you can access or check Ofgem’s useful grants webpage.

If you are worried about debt and want to look at possible solutions, you can call the charity’s telephone helpline on 0800 043 40 50, Monday to Friday 8am-6pm”