Uk News How to manage bills when price cap increases, and if you should switch provider United Kingdom news
PremierLeague-News.Com - The energy price cap is set to increase once again in October, and again next year, and predictions expect a bigger jump than last time
PremierLeague-News.Com - Breaking Sport Transfer News ! Energy prices are going up and up, and many are worried about what the coming months will bring.The energy price cap is set to increase once again in October, and again next year, and predictions expect a bigger jump than last time.So what should you do? Here’s everything you need to know.What is the energy price cap?The energy price cap was launched in January 2019 by government energy regulator, Ofgem, as a way of keeping down the cost for households across the UK.It is reviewed twice a year to reflect the costs of supplying electricity and gas for suppliers. Changes come into effect every April and October.Although it was due to be a temporary measure, it has remained in place due to the ongoing industry trouble.The energy cap applies if you’re on a default energy tariff, whether you pay by direct debit, standard credit or a prepayment meter. More from MoneyWhen energy prices could go down and when the next price cap increase will be03 August, 2022Your Saving Grace: eBay won't refund me for car pump that is faulty - can I get my money back?03 August, 2022Why you haven't received your cost of living payment yet, and how to report it missing03 August, 2022It does not apply if you are on a fixed-term tariff or have chosen a standard variable green energy tariff Ofgem has exempted from the cap.However, at present fixed-term tariffs are more expensive than the cap, meaning the majority of people are affected by it.Ofgem says: “The global rises we’re seeing in gas prices mean this is a very challenging time. Right now, this may mean you find few better value tariffs than being on a supplier’s default rate covered by the Government’s energy price cap if you are already on one.”What is it predicted to do?The price cap is set to rise again in October.If BFY’s predictions are accurate it will soar to £3,420.A separate set of forecasts released by energy analysts Cornwall Insight previously predicted bills would rise to £2,980 in October and then £3,003 next year.Either way, present forecasts suggest the cap will rise significantly.In response, the UK’s three largest debt charities have called on Ofgem to urgently increase protections for people with energy arrears, as rising costs continue to impact households.Citizens Advice, the Money Advice Trust and StepChange Debt Charity are warning that with this substantial rise, more needs to be done to help those falling into financial difficulty.Should I switch energy provider?This is the million dollar question, but unfortunately the answer is not simple and it will depend on your own energy usage.Experts have said there are currently no fixed price tariffs that are cheaper than the current price cap.
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.Justina Miltienyte, head of policy at Uswitch.com, said: “As it stands, there are no fixed deals cheaper than the current price cap predictions. Some households may prefer to pay over the odds to have the stability of a fixed deal that will cover next winter when energy use will be higher – but it’s crucial that bill payers don’t feel pressured into taking out an expensive fixed tariff if they will struggle to manage the cost. “Keep a close eye on the market and run regular comparisons to see what deals are on offer. By signing up to alerts, you can stay close to what’s happening in the energy market and be informed when a good deal comes along.“If you are struggling with the cost of energy, contact your supplier as soon as possible so you can agree on a more affordable payment plan.”Money Saving Expert Martin Lewis has crunched some figures, and says there are some circumstances in which it is worth considering.He writes in his latest article: “Before the energy world changed last October, I always said the price cap rate was pants, so switch to something cheaper. Today, there are no tariffs meaningfully cheaper than the current price cap. So none of this is about switching somewhere cheaper than now…“So if we factor in two months on the current rate, three at October’s, three at January’s, three at April’s and one at July’s (trickier to do as the 2023 rates are a very weak prediction), and adjust for higher use in the winter, if the predictions are right, on average you’ll pay 72 per cent more over the next year than you do now. Of course, some of this is crystal-ball gazing and averaging, but overall my best guess as a rule of thumb is…“If you’re offered a year’s fix at no more than 70 per cent above your current price-capped tariff, or 75 per cent more if you very strongly value budgeting certainty, it’s worth considering.”He adds: “If you want price certainty, the cheapest fixes now give you that, but you’ll pay more in the short term. If in doubt though, there’s nowt wrong with playing safe and sticking on the price cap.“And it should be noted if wholesale rates drop, cheaper fixes could be available in future, so by locking in now you miss out, especially if your fix has higher exit penalties.”Comparison websites such as Moneysupermarket and Confused.com can help with finding current deals. Energyhelpline also has advice for those not sure whether to switch energy providers.Some comparison sites offer tools that let you put your renewal date in and will email you to remind you to switch.
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