One-week warning for every household ahead of price cap change – move to make now to avoid higher bills
MILLIONS of households must make a vital move ahead of a big change to energy prices coming in days.
Bills are set to fall by £122 a year for the average home from July 1.
The energy regulator Ofgem confirmed the new price cap last month, and it comes into effect on Monday.
The cap will fall from the current rate of £1,690 a year to £1,568 – the lowest level in two years.
But bear in mind that the price cap is reviewed every three months, so your annual bill could still change.
But households need to make sure they have taken a meter reading before midnight on June 30.
An updated meter reading helps stop your supplier from determining bill prices that aren’t accurate to your usage.
In addition, if you are disputing a bill, taking a meter reading is a must.
If it’s lower than your estimate, you can ask your provider to lower your monthly direct debit to a more suitable amount.
The energy price cap works by setting a limit on the maximum amount suppliers can charge for each unit of gas and electricity.
It’s not a cap on how much you can be charged for the energy that you use – so if you use more, you’ll pay more.
Below we explain how gas and electricity rates are changing and how you can calculate your bill.
How are gas and electricity rates changing?
Currently, a typical household that pays their energy bill by direct debit pays the following rates:
- 6.04p per kWh for gas
- 24.50 pence per kWh for electricity
- A standing charge of 31.43p per day for gas
- A standing charge of 60.10p per day for electricity
But from July 1, Ofgem will introduce the following new rates:
- 5.48p per kWh for gas
- 22.36p per kWh for electricity
- A standing charge of 31.41p per day for gas
- A standing charge of 60.12p per day for electricity
How do I calculate my energy bill?
BELOW we reveal how you can calculate your own energy bill.
To calculate how much you pay for your energy bill, you must find out your unit rate for gas and electricity and the standing charge for each fuel type.
The unit rate will usually be shown on your bill in p/kWh.The standing charge is a daily charge that is paid 365 days of the year – irrespective of whether or not you use any gas or electricity.
You will then need to note down your own annual energy usage from a previous bill.
Once you have these details, you can work out your gas and electricity costs separately.
Multiply your usage in kWh by the unit rate cost in p/kWh for the corresponding fuel type – this will give you your usage costs.
You’ll then need to multiply each standing charge by 365 and add this figure to the totals for your usage – this will then give you your annual costs.
Divide this figure by 12, and you’ll be able to determine how much you should expect to pay each month from April 1.
How do I take a meter reading?
How you take a meter reading can vary depending on the type you have, and we explain it in further detail below.
There should be a digital display or dial with numbers on it, which you can then report to your supplier.
If you’re not sure which numbers to use, Citizens’s Advice has a handy guide.
Once you have the numbers you should be able to submit them to your supplier.
This can be done in several ways depending on which supplier you’re with – such as via app, text message phone or website – so check with your supplier.
It is always worth taking a picture of your meter reading when you submit it to your supplier – just in case you need it as evidence for a future dispute.
Below we explain the two ways you can take your meter reading based on the type you have.
Electricity meters
If you have a digital electricity meter, you will just see a row of six numbers – five in black and one in red.
Take down the five numbers in black and ignore the red number.
If you are on an Economy 7 or 10 tariff which gives you cheaper electricity at night – you will have two rows of numbers, so take both readings down.
If you have a traditional dial meter you will need to read the first five dials from left to right ignoring any red ones.
If the pointer is between two numbers, write down the lower figures and if it is between nine and zero write down the number nine.
If the dial is directly over a number, write down that number and underline it.
If you’ve underlined a number, check the next dial to the right.
If the pointer on that dial is between 9 and 0, reduce the number you’ve underlined by 1.
For example, if you originally wrote down 5, change it to 4.
Gas meters
If you have a digital metric meter showing five numbers and then a decimal place, you only need to write down the first five numbers from left to right.
If you have a digital imperial meter your meter will read four black numbers and two red numbers – note down the four black numbers only.
If you have a dial gas meter, follow the same steps as those for those with a dial electricity meter, but ignore underlining any figures.
What energy bill help is available?
There are a number of different ways to get help paying your energy bills if you’re struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don’t think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have grant schemes available to customers struggling to cover their bills.
But eligibility criteria vary depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £1,500.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don’t need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill, and some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you’re struggling.
Get in touch with your energy firm to see if you can apply.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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