More than 7 million households are being urged to send in their meeting readings from today to avoid paying higher costs as the energy price cap rises.
The cap for a typical household in England, Scotland and Wales will rise by 2% from today as cooler temperatures see many switching on their central heating.
Households paying by direct debit for gas and electricity will see a jump from the current £1,720 to £1,755 per year.
The StepChange debt charity said although the £35 ‘seems like a small amount’, there has been a 32% rise in average energy debt.
Uswitch has also calculated the average home would spend £140 on energy in October compared with £63 in September -due to higher rates and increased usage in autumn.
The increase comes despite wholesale prices falling by 2% over the three months prior to Ofgem’s latest price cap decision.
How can households receive an energy bill discount?
Standing charges – the figure consumers pay per day to have energy supplied to their homes – are also set to rise by 4% for electricity and 14% for gas, or 7p a day, primarily driven by the Government’s expansion of the Warm Home Discount.
Around 2.7 million more low-income households, including 900,000 families with children, are eligible for the £150 Warm Home Discount this winter, after the Government confirmed it would remove the “hard to heat” eligibility criteria.
The Government has said the change will see an estimated 6.1 million households receive the discount this winter.
Why has the energy price cap risen?
Ofgem said the latest increase was driven by an increase in electricity balancing costs adding around £1.23 a month to the average household bill.
Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets.
The energy price cap was introduced by the Government in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use.
It does not limit total bills because householders still pay for the amount of energy they consume.
Energy bill debt is rising
StepChange said: ‘Not only will people find they are having to switch on their heating now as the weather turns colder, but bills are also set to go up this month, which is another blow to household finances.
‘Energy arrears are the most common type of debt across household bills that we see at StepChange, and people have had little respite from steep costs over the past three years.
‘For anyone who is struggling or worried about energy bills, there is support available out there – contact your supplier, check to see if you’re eligible for any grants, and of course you can always get in touch with an organisation like StepChange.’
Which? Energy editor Emily Seymour said: ‘As we head into the colder weather, many households will be concerned that the energy price cap is going up by 2% this week.
‘There are several deals on the market for lower than the price cap, so now is a good time to shop around if you’re looking to fix. As a rule of thumb, we’d recommend looking for deals cheaper than the current price cap, not longer than 12 months and without significant exit fees.
‘If you’re on a variable tariff, make sure to submit a meter reading to ensure you pay the cheaper rates for any energy used before the new price cap takes effect.’