Energy bills - what you need to know and how to complain as price cap jumps again

Energy bills - what you need to know and how to complain as price cap jumps again If you are worrying about your energy bill, consumer rights expert Martyn James has some tips and advice to help you through the next months Energy bills are back in the news… and that news isn’t good. The latest energy price cap has come in to force – in this case by 4%. That means the average bill will go up by £60 to £1,723 a year. That’s for a two up, two down house. Worryingly, the energy experts Cornwall Insight are predicting a further increase to £1,999 a year next January. Meanwhile, the cost of living crisis continues to bite, with many essential bills rising at rates above inflation too. Depressing stuff right? I don’t have a magical solution to these problems. But if you are worrying about your energy bill, then I have some explanations, tips and advice to help you through the next months. Here we go… What is the energy price cap? The Energy Price Cap is the maximum amount energy suppliers can charge for each unit of energy and is often shown as the total you would pay over a year for the ‘average’ bill. Every three months, Ofgem announces what the price cap will be. This means you can make a pragmatic decision about sticking with a ’variable rate’ – one that can increase or decrease – or fix a cheaper rate. The current price cap runs from 1 October to 31 December 2026. Are we really using less energy? Every two years, Ofgem reviews the way it measures how much energy we are using on average. This is known as ‘Typical Domestic Consumption Values (TDCV)’. The latest review found that the amount of energy we use has reduced by 7% for electricity and 17% for gas. This means the average overall estimate for energy use has dropped by around £200 a year – not that energy is getting cheaper for each unit we use. You may see two different ‘average’ prices used in the media when talking about the price cap. However, I’d look at the newer (lower) figure, as it gives an indication that you may be paying over the odds. For example, the new measures suggest that the average ‘low’ usage (for one to two people living in a flat), is around £1,208 a year. If you’re paying noticeably more than that despite living in a similar flat, then you may want to check your meter and speak to your energy supplier. Why is gas more expensive than electricity According to Ofgem, wholesale gas prices have increased by a whopping 28% compared to the previous quarter. There’s also a lot more competition for these resources. Gas is also used to generate electricity, but we have a range of other resources too, like renewables and nuclear. However, prices remain lower than the height of the energy crisis in 2022 when Russia invaded Ukraine – and the cap remains around the same level as it was during the same period last year Do I get a discount for paying by direct debit? You do, though it varies. For most people it’s around 8% off the bill. Ofgem estimates a saving on average of £143 a year for the 45% of people not paying using a method that gives a reduction to the bill. Fixing your energy bill Energy fixing is where you agree to ‘fix’ a price for the units of energy you use for the duration of the contract. You can do this by switching or by staying with your current energy supplier. Around 22 million households are on fixed tariffs but there are 34 million others who will see bills increase. Have you already fixed your bill? Don’t relax, because your deal may be coming to an end! Check your tariff now and speak to your energy supplier about fixing a new rate when the current one ends. How to find an energy deal that works for you You can find a wide range of energy switching deals on comparison sites, but bear in mind that they may not display every deal available. Don’t rush in to a decision though. Take a short while to understand more about the various options available. There are lots of different types of energy tariff out there, but most fall in to four categories. - Fixing the biggest discount, but with exit fees/other conditions. - Fixing a lower discount with no exit fees. - Fixing just gas or electricity. - Choose a ‘discounted variable price cap’ tariff that stays a percentage under every price cap. You may be able to ‘bundle’ your energy bills with other utilities to get a discount. If you have a pre-payment meter, then are some fixed deals out there for you too. Don’t forget that you’re on a slightly cheaper price cap. What do I need to check before committing? Once you’ve found a tariff that works for you, check out the T&Cs. Here are some things to bear in mind if you are thinking about fixing: - Duration. How long is the contract? - Total price of the contract. How much are you saving by fixing a price over the term of the contract? - Exit fees. How much do you have to pay to get out of the contract early? - Deal breakers. Do you have other contractual obligations to get a good deal, like taking out an insurance policy through the business too? Exit fees apply to many deals and range considerably in price, though they are usually highlighted in comparison tables. Bear in mind if the price cap drops significantly during your contract, you could have to pay to leave early. How do I cut my energy bill? If you can’t afford your bill, don’t stop using energy – contact the firm and ask what they can do to help. But if you want to save some cash, the Energy Saving Trust has loads of tips. Can I go to another supplier if I have an energy debt? Potentially you can, though if the debt is over 28 days old you will be asked to pay it off. Some suppliers may allow you to transfer it over, though not all of them do. You can ask for a payment plan if you can’t afford to pay the whole debt because money is tight. How do I know if my bill is right? Around four million smart meters aren’t sending readings correctly. So check your bill for the letter ‘E’ after your unit use. This means the bill is estimated. If your unit usage has increased but your lifestyle hasn’t, that also suggests a problem. What if I can’t afford to pay my bill? If you don’t have enough money to cover your outgoings – or you are left with little to cover you for emergencies – you meet the definition of financial difficulties. According to Ofgem’s regulations, your energy provider should come up with a tailored plan to meet your needs. You can read what businesses are supposed to do on Ofgem’s website. The regulator says that you can ask for the following: - A review of your payments and debt repayments - Payment breaks or reductions - More time to pay - Access to hardship funds - Advice on how to use less energy - The option to go on the Priority Services Register – a free service for a wide range of people struggling or who need support: How do I make a complaint? Tell the business you are making a formal complaint and ask for a response in writing. If you are still unhappy, the Energy Ombudsman can help. The ombudsman is a free and impartial alternative to courts. - Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist