Energy prices to rise for millions of households - find out how to save

Energy prices to rise for millions of households - find out how to save

author: Sarah Neate

By Sarah Neate


Millions of householders will see their energy bills go up from 1 April to pre-pandemic prices, due to a rise in the energy price cap.

Eleven million gas and electric customers on typical dual-fuel tariffs, who pay their bill by direct debit, will find their energy bills rising by £96 to £1,138 a year.

Meanwhile, four million customers with pre-payment meters will pay £1,156 – £87 more a year.

Ofgem, the energy regulator, has raised the price cap for households, mainly as a result of a rise in wholesale prices.

In October, the regulator cut the price cap by £84 but demand for energy has recovered, pushing wholesale prices back up to pre-pandemic levels.

What is the energy price cap?

The price cap protects consumers who have not switched energy supplier by ensuring they pay a fair price for their electricity and gas.  

Ofgem adjusts the level of the twice a year in England, Scotland and Wales to reflect the costs of supplying electricity and gas for suppliers, while Northern Ireland sets its own cap.

It says the price cap saves customers up to £100 a year and they could save £150 more a year by shopping around for a cheaper deal.  

Jonathan Brearley, chief executive of Ofgem, said: “Energy bill increases are never welcome, especially as many households are struggling with the impact of the pandemic. We have carefully scrutinised these changes to ensure that customers only pay a fair price for their energy.  

“As the UK still faces challenges around COVID, during this exceptional time I expect suppliers to set their prices competitively, treat all customers fairly and ensure that any household in financial distress is given access to the support they need.”

Responding to Ofgem’s decision, Citizens Advice has said the price rise will be “a heavy blow” to a lot of households.

Alistair Cromwell, acting chief executive of Citizens Advice, said: “For many people on Universal Credit it will come at the same time as the £20 a week increase to the benefit is set to end.

“With a tough jobs market and essential bills rising, now is not the time for the government to cut this vital lifeline”. 

How can I cut my energy bills?

  • Suppliers must provide emergency credit to customers struggling to top up their pre-payment meters; help customers who are financial difficulty set up affordable repayment plans; and they should not disconnect customers.  
  • Citizens Advice can provide advice on resolving problems with your energy provider. Visit its website or call 0808 223 1133.  
  • For help on how to switch to a better deal, see Ofgem’s guide.
  • If you are struggling to pay your energy bill, contact your energy supplier as soon as possible. You may be eligible for extra help, such as payment breaks, suspending credit meter disconnections, and schemes such as the Winter Fuel Payment or Warm Home Discount rebate. 

Find out five ways to cut your household bills this year.

Disclaimer: All information and links are correct at the time of publishing.

author: Sarah Neate

By Sarah Neate

Energy prices to rise for millions of households - find out how to save Energy prices to rise for millions of households - find out how to save