Millions of Britons have been urged to submit energy meter readings to avoid paying higher bills than necessary, as a 13 per cent jump to the energy price cap takes effect.
An estimated 5.3 million households on standard tariffs who do not have a smart meter have been urged to take action to avoid paying for energy they have already used at the new, more expensive rates that take effect from Wednesday. Most customers will have up to 14 days after a new price cap to submit a reading.
Ofgem’s price cap sets the maximum amount firms can charge homes on standard tariffs per unit of gas and electricity.
Under the new cap, households paying by direct debit will see electricity costs climb from 24.67p a kilowatt hour to 26.11p, while gas charges will rise from 5.74p a kWh to 7.33p.
Based on the new rates, the average gas and electricity bill is projected to rise by £221 to £1,862 a year.
The jump has been largely driven by a spike in global energy wholesale prices caused by the Middle East conflict.
Uswitch energy spokesman Ben Gallizzi said: “There are two crucial things you should add to your to-do list for the coming days – submit a meter reading and get a cheap fixed energy deal.
“Millions of households should take a moment to read their meter at the end of the month to avoid being overcharged for their energy due to higher prices kicking in from July.”
Minister for energy consumers Martin McCluskey said: “We know families are deeply concerned about rising energy bills because of a war we did not choose, and we are determined to fight their corner to tackle energy affordability.
“The action we took at the budget, which has taken an average of £150 off energy bills, is now factored into bills for the years to come.
“We have also expanded the Warm Home Discount scheme, which benefitted around six million households last winter and will remain in place for the rest of the decade.
“We will continue to monitor the situation ahead of the winter and plan for all contingencies, while doubling down on our mission for clean power to bring down bills for good.”
The jump in the price cap comes as the latest forecasts suggest bills are set to remain high throughout this winter, falling by only around 0.5% in October compared to July as the US-Iran 60-day ceasefire helps to stabilise wholesale gas markets, Cornwall Insight said.
However, it warned conflicting reports on the reopening of the Strait of Hormuz, the patchy progress of peace talks and uncertain timelines for repairing key regional infrastructure meant prices remained high, if less volatile than in the spring.
Cornwall said it expected a typical household to be facing a bill of £1,849 from October.
While Ofgem is updating its definition of a typical consumer from July to reflect falling household energy use, which adjusts the headline figure to £1,654, Cornwall said this represented “little change” on a like-for-like basis.
While July’s higher prices will be cushioned by warmer weather and lower household energy use, the October cap will land as people switch their heating back on and will have a greater impact on household finances.
Prices rocketed after Iran responded to US and Israel attacks by blocking the Strait of Hormuz shipping route, through which a fifth of the world’s oil and gas is carried.
Ofgem will announce the next quarterly price cap level for October to December on or by August 26.
It leaves a question mark over whether the Government will launch any targeted energy support for the winter months.
While it is unclear who the Chancellor will be later this year, given the change in leadership after Sir Keir Starmer resigned, cost-of-living and bills pressures will be top of their inbox.
Chancellor Rachel Reeves said earlier this year she would consider some form of support in the autumn if necessary and if energy prices remain high.
Even though energy bills may not go up further in October, many will face a payment shock in the winter months unless prices come down.
Figures earlier this week from Ofgem showed debt owed to energy suppliers reached a record high of £4.79 billion in the three months to March – a 5% increase on the last quarter and 15% higher year on year.
