In October 2021, Ofgem increased the price cap to £1277 across the UK. For the average consumer, this means most people saw their energy bill rise by £139 a year or more if they were on a pre-payment meter. Following this, on 3 February 2022 Ofgem announced the default tariff cap to rise by an eyewatering 54% from 1 April 2022.
This has put pressure on many households. We’ve put together this article to cover why energy prices have risen so steeply and what to do if you are struggling.
Why are energy prices rising?
Put simply; it’s down to an increase in the wholesale gas prices that the energy suppliers pay. These costs have been rising quickly since Ofgem updated its price cap in December 2020. Gas prices reached record highs as the world came out of lockdown and other economic factors affected the rising costs. As a result of the steep price rises, over twenty smaller energy companies went bust because they couldn’t survive the volatile energy market and the substantial wholesale price hikes.
Unfortunately, for consumers, it meant that the price increases suffered by the energy companies are now being passed on to households through energy bills.
Will my energy bill go up?
According to Ofgem, consumers on a standard variable tariff are likely to see a price increase of around £139 per year. If you are lucky enough to be on a fixed deal, your bills won’t go up until your contract ends. Until recently, it was common practice for consumers to switch energy suppliers when their bills increased. However, now energy prices have reached record highs, there are no longer any cheap energy deals to be had. Ofgem’s advice right now is to stick with your current supplier.
Help if you are struggling
If you are struggling to pay your energy bill, it’s advisable to contact your supplier sooner rather than later. Your energy supplier has an obligation to help you develop a payment plan that works for you both. Additional support is also available for the vulnerable. For example, your supplier can advise you of any grants available and charities that may be able to help.
Other ways to reduce your energy bills
Energy price rises have affected the whole nation. One way to reduce your energy bills is to make your home more energy-efficient. This can be done in several ways:
- Improve your insulation
- Upgrade your appliances and boiler
- Install solar panels and other renewable technology
There are grants available to help with the above energy efficiency home improvements. However, even without grants, they are still surprisingly affordable and can save you a substantial amount of money in the long run.
If you need professional help to choose the cavity insulation that's right for you, contact us for a free, no-obligation survey. Extract Insulation has been working with a variety of customers to meet their insulation demands since 2013.