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6 Aug 2021

Energy bills set to rise £139 for 15 million people: how to make sure you're not among them

This is the gas and electricity price cap's highest ever price rise
Woman looking shocked at the price of her energy b

On 1 October you could be waking up to a whopping energy bill increase, thanks to today's announcement that the energy price cap on some deals is increasing by £139per year.

The rise is mainly due to high wholesale gas prices. These have risen by more than 50% since February according to energy regulator Ofgem, which sets the cap.

Meanwhile cheap energy deals are disappearing, making it trickier to make big savings on your energy bills.

But there are still things you can do to stop your bill rising this autumn. Keep reading to find out.

Use our free, independent price comparison website Which? Switch, to compare gas and electricity prices and see if you could save.

Will my energy prices rise?

The price cap applies to certain types of energy deals:

  • Standard tariffs
  • Default tariffs
  • Out-of-contract tariffs

In reality, all of these are names for the same thing. If you haven't switched energy supplier or tariff in a while, or took no action when your last fixed deal ended, you'll be in line for a price rise.

Energy companies don't have to raise their prices to match the cap, but the biggest firms typically do.

Prepayment meter tariffs are also covered by the price cap. These are set to rise by even more.

If you've chosen a fixed deal (one that has a set contract length) then you won't be affected by the price cap changes.

How much could my gas and electricity bill increase?

A household that uses a medium amount of gas and electricity (defined as 12,000kWh gas and 2,900kWh electricity per year) can expect their bill to increase by around £139 per year.

That's around £11.60 extra per month.

The same household paying by prepayment can expect around £153 to be added to their bill per year.

If you pay when you receive your energy bills, your bills could go up by £149.

But the exact amount extra you'll have to pay depends on how much power you use. The price cap is not an absolute limit on your bills.

How to stop your energy bill rising

You can avoid the incoming price hike by switching away from an out-of-contract or default tariff.

Choose a fixed tariff if you want price certainty. Fixed deals guarantee the same price (per unit of energy) for a set period of time.

Use Which? Switch to compare gas and electricity prices and find the cheapest deal for you.

You don't have to change supplier to avoid the price rise. Look for your supplier's cheapest deal on its website, by phone, or using a price comparison website, like our own Which? Switch.

There's plenty of time to switch: find out how to switch energy supplier and how to find the best energy deal.

Should I fix my energy prices until 2022?

In a word - yes.

  • Switch from a deal at the level of the current price cap and you could save around £102 per year
  • But since the price of your old deal will likely rise in October, you'll dodge paying the extra £139 and save a total of £241 over the next year.

Fixed deals guarantee the same prices (per unit) throughout your contract. They're typically 12 or 24 months long. Since energy prices are rising at the moment, it's worth fixing for 12 months to avoid further increases.

Cheap variable deals might be tempting but the price can change with 30 days' notice.

Why are energy prices going up?

Global prices for fossil fuels, especially gas, were 'increasing at an unprecedented rate', Ofgem warned last month.

Gas price rises are owing to:

  • A longer winter meant refilling gas stores was delayed
  • Global recovery from Covid-19 means gas demand is up, especially in Asia.

Since some of our electricity is generated from gas, this means electricity prices are affected too.

Lisa Barber, Which? Home Products and Services Editor, said: 'Many people may already be struggling to keep up with their energy bills, and will be frustrated by yet another sharp price hike on the horizon which will hit their pockets this winter when their energy usage will inevitably increase.

'With cheap deals disappearing from the market fast, energy customers on default or standard variable tariffs should not hesitate any longer and switch to a better tariff or provider as this is the best way to keep bills down - you could find a deal £241 cheaper than the new price cap level. Consumers should choose a fixed tariff if they want price stability.'

What to do if you can't pay your energy bills

Woman worrying about energy bill

An £11.60 per month increase to your bills is hardly small change.

Besides switching to a cheaper deal, try these tips to keep your bills in check:

  • Check if you're eligible for the Warm Home Discount, worth £140 per year
  • Opt for paperless energy bills and manage your account online (some firms charge extra for paper bills)
  • Pay by direct debit. You can be charged more - even if you're protected by the price cap - for paying when you get a bill or by prepayment
  • Get a smart meter installed or send regular meter readings to make sure your bills are accurate. Find out how to get a smart meter
  • Replace light bulbs with energy-saving ones when they blow. They're much cheaper to run
  • Find out if you can get free insulation
  • Don't leave gadgets on standby when you're not using them.

Talk to your energy supplier if you can't pay your bills. They must treat customers fairly and agree a payment plan with you that you can afford.

You can ask for a payment break, payment reduction, more time to pay, access to hardship funds and to be added to its priority services register (if you are in a vulnerable situation).

Read more about what to do if you can't pay your energy bill.

Many firms offer emergency credit and friendly credit for customers with prepayment meters. Find out if a prepayment meter is right for you.

Which? energy pricing data

Prices are based on widely-available dual-fuel tariffs, paying by fixed monthly direct debit, with paperless bills.

Energy use is based on Ofgem's annual average figures for a medium user (12,000kWh gas and 2,900kWh electricity).

Comparisons are based on the energy price cap levels, as announced by Ofgem. Data is from Energylinx and correct on 5 August 2021. Prices are averages across regions, rounded to the nearest whole pound.