What do the new energy prices mean for YOUR money?
MILLIONS of households will see their energy bills fall by £238 a year by the spring.
Energy regulator Ofgem has confirmed the new price cap affecting the 29 million households on the standard variable tariff.
The limit will increase from £1,928 to £1,690 on April 1.
It means an average household will see their annual bill fall by £238.
It is important to note that the price cap is not a limit on the total amount people will pay for their energy.
Instead, it limits the amount customers pay per kilowatt hour or unit of gas and electricity.
The figure is calculated based on what Ofgem thinks an average household will use.
This is calculated on the assumption that an average household uses 2,700 kWh of electricity and 11,500 kWh of gas over a twelve-month period.
Those who use less will pay less, and those who use more will pay more.
Here’s what April’s price limit means for your money.
What does this mean for those who pay by direct debit?
Direct debit is one of the most popular choices for paying your energy bill.
It’s a hassle-free method that automates payments from your bank account so you never miss a due date.
You can choose monthly or quarterly payments, depending on what works best.
The energy regulator will reduce the price that a supplier may charge for gas via direct debit from 7.42 cents per kWh today to 6.04 cents from April 1.
However, the average standing charge for gas will increase from 29.60p to 31.43p.
The standing charge covers the costs of connecting your home to the network, carrying out meter readings and maintenance.
This is paid every day, 365 days a year.
Ofgem said the electricity price will fall from 28.62p per kWh to 24.50p.
But the average standing charge for electricity will also increase from 53.35p to 60.10p.
This means that a typical household with direct debit is now expected to pay £1,690 per year.
How do I calculate my energy bill?
BELOW we show you how you can calculate your own energy bill.
To calculate how much you pay for your current fixed consumption, you need to know your unit rate for gas and electricity and the fixed charge for each fuel type.
The unit rate is usually stated in p/kWh on your invoice. The standing charge is a daily rate that is paid 365 days a year, regardless of whether you use gas or electricity.
You must then record your own annual energy consumption from a previous bill.
Once you have this information, you can calculate your gas and electricity costs separately.
Multiply your consumption in kWh by the unit price in p/kWh for the corresponding fuel type. This is how you get your consumption costs.
You must then multiply each standing charge by 365 and add this figure to your usage totals. This is how you get your annual costs.
Divide this amount by 12 and you can determine how much you have to pay each month from April 1.
What does this mean for those who pay with a prepayment meter?
Prepayment meters are a pay-as-you-go solution for energy consumption. You can top up your meter at various locations or online.
This used to be one of the most expensive payment options, but Ofgem has confirmed that the premium paid by people with prepayment meters will continue to be subsidized.
The energy regulator will reduce the price a supplier can charge those who have a gas prepayment meter from 7.24p per kWh today to 5.28p from April 1.
The average standing charge for gas drops from 33.32p to 31.43p.
Ofgem said electricity prices will fall from 28.17p per kWh to 23.72p.
However, the average standing charge for electricity will increase from 55.53p to 60.10p.
This means that a typical household with a prepayment meter is now expected to pay £1,644 per year.
What does this mean for those who pay after receiving their invoice?
Those who prefer a more traditional approach can pay their utility bills in a variety of ways, including cash, checks or cards.
However, this is the most expensive payment method.
The energy regulator will reduce the price a supplier can charge those who pay after receiving their gas bill from 7.81 cents per kWh today to 6.36 cents from April 1.
However, the average standing charge for gas will increase from 34.97p to 35.21p.
Ofgem said electricity prices will fall from 30.12p per kWh to 25.79p.
But the average standing charge for electricity will also increase from 60.01p to 65.88p.
This means that a typical household that pays after receiving the bill is now expected to pay £1,797 per year.
How can I get help with my bills?
Households should check whether they are eligible for energy support schemes or subsidies.
The government runs the Warm Home Discount scheme, which provides £150 of energy credit to help with bills during the winter, and has recently introduced the Great British Insulation Scheme.
Municipalities also offer the Household Support Fund.
Many suppliers have customer support funds that offer home insulation, energy efficient white goods and cash subsidies.
Here is a list of schemes currently open:
- British Gas Energy Trust Individuals and Family Trust
- British Gas Energy Trust
- EDF Customer Support Fund
- E.ON and E.ON Next subsidies
- Octopus Energy Assist Fund
- OVO energy
- Scottish Power Hardship Fund