Martin Lewis issues update on energy bills rises – and it’s good and bad news for customers
MARTIN Lewis has explained the latest predictions for energy bills from next year.
The Money Saving Expert this morning told his followers on Twitter that a typical yearly bill will cost £3,702 from April 2023.
It comes as fresh forecasts by energy analysts at Cornwall Insight predict that the average consumer will pay over £600 less than was predicted last month.
Cornwall Insight’s April to June 2023 figures released on October 17 predicted the price cap to be £4,347.69.
But the new figure is still well above the £2,500 current price cap.
Martin described the updated predictions as “bad and good news”.
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He said: “It’s early days but Cornwall Insight’s latest prediction for the April price cap (which returns then unless govt changes rules) is a 48% rise; taking a (meaningless but illustrative) typical bill to £3,700/yr from £2,500.
“Yet it’s less than the 72% predicted before.”
The new figures will still see the average household paying £1,202 more than the Energy Price Guarantee (EPG) that is in place at the moment.
Energy bills were initially set to be frozen at £2,500 for the typical household for two years.
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The two-year price freeze on bills would have saved households £1,000 a year.
In mid-October, Chancellor Jeremy Hunt announced that the guarantee will only last until April.
The emergency measures came into place on October 1 to help with soaring bills as the cost of living worsens.
It applies to customers on standard variable tariffs.
It sees the Government limit the price suppliers can charge customers for units of gas, and replaced the price cap set by regulator Ofgem.
Further predictions from Cornwall Insights show that prices for January to March next year will remain high.
While domestic consumers will be shielded from the increase by the Energy Price Guarantee, the rise in prices will see higher costs for the government as they make up the difference with suppliers.
The forecast per unit rate from January to March for electricity, for example, is 66.76 p/kWh which compares with 34.00 p/kWh under the EPG.
While the figures for gas are 17.05 p/kWh and 10.30 p/kWh respectively.
A spokesperson for the company said: “Despite the fall in the price cap from April 2023, the prices remain significantly above the £2,500 EPG levels, which will likely prompt calls for greater government intervention.”
Below, we explain more about what the EPG means for you, and how much you might expect to pay depending on the type of home you live in until April next year.
What is the energy price cap?
The energy price cap sets a limit on the unit price and standing charge that companies can bill their customers.
The cap is based on wholesale prices over a six-month period.
It was set to soar to £3,549 on average per year from October 1.
But the energy price guarantee replaces this – and bills are frozen at £2,500 for the typical household until April.
It only means firms will be limited in what they charge customers.
You pay for how much energy you use, so your bill could be higher than £2,500 a year.
The price cap affects millions of people on default or standard tariffs offered by the country’s energy providers, according to Ofgem estimations.
An increasing number of energy users are on the price cap as there are limited fixed deals left on the market.
The price cap was originally set up in January 2019 by Ofgem, in a bid to limit how much providers can charge on default energy bills to spare Brits from being unfairly charged.
It has soared to eye-watering heights this year due to the energy crisis.
What does the price guarantee mean for you?
The energy price guarantee means the average household will save £700 on their yearly energy bills, according to the government.
But not everyone will see their yearly costs stay below £2,500.
Those in detached homes’ average yearly bills will be £3,300, while semi-detached homeowners will see theirs reach £2,650.
All other types of households will see their average energy bills priced below £2,500 though, including flat and bungalow owners.
Those on a duel fuel standard tariff that pay their bills by direct debit are will pay a unit rate of:
- 10.3p per killowatt hour (p/kWh) for gas
- 34p/kWh for electricity
- A standing charge of 27p per day for gas
- A standing charge of 45p per day for electricity
The amount can vary very slightly based on the company you’re with, where you live and how you pay your bill.
For more information on how costs can differ depending on the size of your home see here.
What help is already available?
Over six million people with disabilities are now receiving £150 to help with the rising cost of living.
From October 1, all UK households began receiving the £400 energy bills rebate.
The payment will be made up of six discounts between October and March next year.
Households will receive a £66 energy bill discount between last month and this one, and a discount worth £67 in December, January, February and March.
We’ve listed how the leading energy suppliers plan to pay households the discount and are waiting on others to respond.
The way you’ll be paid will depend on how you pay for your energy.
If you’re on a credit meter the discount will come off your bills, but if you’re on a prepayment meter you’ll get a voucher.
Check with your supplier to confirm how you’ll receive the cash.
From this month, a £300 one-off “pensioner cost of living payment” will be paid out to eight million households.
It will be given to those who already get the winter fuel payment – which is worth between £100 and £300 for those over the state pension age.
Millions of households are in line to get the £150 Warm Home Discount between December and March 2023.
There are plenty of energy grants and schemes open to help you out if you’re struggling.
British Gas has recently confirmed that it’ll pay its most vulnerable customers grants worth £750 to help with sky-high bills.
The British Gas Energy Trust has previously paid struggling households up to £1,500 – and you don’t need to be a British Gas customer to apply for this help.
Ask your supplier what’s on offer and how to apply, or check here:
- Bulb energy fund
- EDF’s energy customer support fund
- E.on’s energy fund
- Octopus Energy Octo Assist fund
- Ovo’s debt and energy assistance
- Scottish Power’s hardship fund
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Universal Credit claimants will also receive an extra cash bonus on top of the second half of the £650 cost of living payment that will be landing in bank accounts from November.
In December, millions of people who claim UC and other benefits will be able to get their hands on an extra Christmas bonus cash boost – find out more here.