Senin, 01 Juli 2024

Energy price cap change mean lower bills but relief may be temporary - BBC.com

Energy prices fall but relief may be temporary

Woman standing in front of radiator looks at energy bill with phone in her other hand

A drop in domestic gas and electricity prices has now taken effect, but costs are expected to rise again in October.

Regulator Ofgem's new price cap for England, Wales and Scotland came into force on Monday, meaning a typical household's energy bill will fall by £122 a year.

That brings down the bill for a household using a typical amount of gas and electricity to £1,568 a year, the lowest for two years.

But forecasters expect it to rise again in the run-up to winter, more than reversing the latest drop.

Leading consultancy Cornwall Insight predicts that a typical household's annual bill will be back up to £1,723 in October, a £155, or 10%, increase from now.

"Modest falls in summer look set to be wiped out by bigger rises in autumn when people will need to put the heating back on," said Adam Scorer, chief executive of charity National Energy Action.

"The cost of energy remains an unaffordable luxury that many of the poorest simply cannot afford."

Although the price cap is changed every three months, it is illustrated by Ofgem in terms of an annual bill for a household using a typical amount of gas and electricity.

People in larger properties will tend to pay more overall owing to higher energy usage, and those in smaller properties will pay less.

Graphic illustrating how a home with low energy usage has an annual bill of £1,148, a medium sized home has a bill of £1,568, and a large home has a bill of £2,182

That is because the cap, set by Ofgem, limits the maximum price that can be charged for each unit of gas and electricity - not the total bill.

It affects the gas and electricity bills of 28 million households, but does not impact customers in Northern Ireland, where the sector is regulated differently but where prices are also falling.

Energy bills are considerably lower than the peak after Russia's invasion of Ukraine, when the government stepped in to limit bill rises.

That has fed through to falls in the general rate of rising prices, known as inflation.

However, a typical household's energy bill remains about £400 higher than three years ago, prompting debate over the issue during the election campaign.

Graphic showing the rise and fall of the typical household energy bill under Ofgem's price cap

In addition, households have built up a collective debt to suppliers of about £3bn owing, primarily, to the pressure from high prices.

Those on prepayment meters, who tend to top up meters during the colder, darker months and are often under more financial pressure, will see a less immediate impact of a drop in prices in the summer.

The vast majority of households pay by direct debit, and their payments are smoothed out over the year. They should have been contacted by their supplier about the latest price changes.

Experts say it is a good idea to take a meter reading now, to ensure billpayers are charged at the correct rate.

Ofgem is reviewing the way the price cap is calculated, including sifting through a host of responses to a consultation on standing charges.

Latest changes in detail

The new prices that took effect for July to the end of September mean:

Tackling it Together strap

How to keep energy use - and bills - down

Experts have shared three tips to keep on top of energy use during the warmer months:

Read more here if you are struggling to pay energy bills

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2024-07-01 19:09:40Z
CBMiLmh0dHBzOi8vd3d3LmJiYy5jb20vbmV3cy9hcnRpY2xlcy9jNnBwMmpkejJwZG_SATJodHRwczovL3d3dy5iYmMuY29tL25ld3MvYXJ0aWNsZXMvYzZwcDJqZHoycGRvLmFtcA

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