Almost all of us pay the standard maximum price for electricity and gas, which is capped by the regulator Ofgem. We can no longer switch supplier to reduce bills – they all charge the capped price and the few deals on offer to fix the price are more expensive, not less. Overall, the cost rose by about 54% – for every £100 you spent before, you now spend £154. That is the average, but the various parts of your bill will have gone up by different amounts. Each unit of electricity will cost 36% more – a rise of just over a third. Each unit of gas almost doubled in price – an 81% increase. However, gas remains by far the cheapest way of heating your home and cooking, so, if you have the choice, keep using it.
One thing you cannot control is the standing charge, which you pay just to be connected. Electricity standing charges have soared by around £75 to an average £165 a year – a cost you cannot reduce by putting on a jumper or turning down the central heating. If you have a prepayment meter or pay your bill every quarter, the electricity standing charge will be about £20 higher. Gas standing charges have not risen much and will average about £100 a year – but around £136 a year for a prepayment meter.
Experts say prices will go up again in october – just in time for winter
All these increases are averages; your bills may have gone up by slightly more or slightly less. If you have fixed your price for one or two years then the increase will be even greater when that deal ends. These higher charges will last for six months. Experts say they will go up again at the next price cap fix in October – just in time for winter.
Some people in flats are not covered by the price cap and their bills will have risen by more. In Northern Ireland the rules are different and there is no cap, so fuel bills there have also gone up sharply. The cost of oil or bottled gas used by many people to heat their homes outside towns and cities is not controlled and is also increasing rapidly.
Three schemes will help with these rising costs. The details differ in England, Scotland, Wales and Northern Ireland.
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Council tax rebate
There is a rebate of £150 for the person who is liable for council tax if their home is in band A, B, C or D. Some local councils have been late in paying it so be sure you get yours. Your latest bill will show your home’s band. Even those whose council tax is reduced to zero because their income is low are entitled to the payment.
In Scotland and Wales the payment is also made to any householder whose home is in band E, F, G, or H but whose council tax is reduced because of their low income. In England and Wales the £150 will be paid into your bank account. That should have happened already if you pay by direct debit. If you pay another way the council should have been in touch. In Scotland the £150 may instead be taken off your council tax bill. If your council has not paid you the money or been in touch, call or write and ask why. All payments must be made by September. If you live in a band E, F, G or H home in England, there is a discretionary fund which will help some low-income households. Most of them will be pensioners living in valuable homes but with limited incomes. They will have to apply for help. Students and others who are exempt from council tax can also get help from this fund. Scotland and Wales also have discretionary funds.
Electricity bill discount
In October there will be a discount of £200 off one electricity bill. If your bill is less than that, the credit will be carried over to future bills. It will also be given to those on prepayment meters. This scheme applies in England, Scotland and Wales, and a similar discount is expected in Northern Ireland. There will be no reduction in gas bills. This discount is more a loan than a gift because it will be taken back by adding a £40 surcharge to electricity bills for the next five years. The discount cannot be refused, nor can the surcharges. The £40 is expected to be added to the annual electricity standing charge for five years from April 2023, pushing that unavoidable cost still higher.
Winter discounts
The Warm Home Discount scheme currently gives £140 off one electricity bill to about two million low-income households. Pensioners on the guarantee element of pension credit get it automatically. Others need to apply to their energy supplier. But many who are eligible do not get it, as the money runs out quite quickly. Some smaller energy suppliers are not in the scheme.
Next winter the discount will be £150 in England and Wales and those entitled will normally get it automatically, linked to the benefits they receive and the energy efficiency of their home. More small suppliers will be included.
Around three million people are expected to get the discount but some who got one last winter may not get one next.
A similar scheme is expected in Scotland. It does not operate in Northern Ireland.
The Winter Fuel Payment is not being changed and next winter will be paid to people born on 25 September 1956 or earlier.
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