Citizens Advice: Energy price cap set to increase from April 1

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Have you noticed a rise in your energy bills, but not quite sure why?

Nick Whittingham writes: Every six months, the energy regulator OFGEM reviews the price cap – the maximum price that energy companies can charge for each unit of energy you use.

It was introduced to protect people who have never changed energy companies or whose company has gone bust for example, as traditionally these tariffs were much higher.

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However, due to steep increases in the price of wholesale gas and higher demand for heating over a cold winter, the new cap has been set at £1,971 per year, (a £693 increase) for direct debit customers, and £1,309 (a £708 increase) for prepayment customers.

NEW PRICE CAP: Bill increases for those not on fixed tariffs. Photo: AdobeNEW PRICE CAP: Bill increases for those not on fixed tariffs. Photo: Adobe
NEW PRICE CAP: Bill increases for those not on fixed tariffs. Photo: Adobe

This means that around 22 million households who are not on fixed tariffs currently will see a significant increase in the price of their gas and electric bills.

At Citizens Advice nationally, we are already seeing a significant increase in debt and cost of living advice.

In the last three months of 2021, frontline staff helped one person every 40 seconds with a fuel debt issue – a 40 per cent increase compared to the same period in 2020.

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Alongside this, the cost of living (like your household’s grocery shopping) is increasing and with the rise in inflation and National Insurance scheduled, people will notice that their income doesn’t go as far as it once did.

This is leading to some families having to choose between heating or eating – but remember we are here to help.

Should I change my supplier?

Currently, our advice is that you do nothing.

The price cap at the moment is the cheapest tariff on the market, so you would perhaps end up paying more if you switch.

I can’t afford my energy bills.

The first step is to assess if you can reduce the amount of energy you use.

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This could be by making certain changes within your home (for example, by turning down your thermostat).

If you need further support, you can contact your supplier directly to see if they offer any grants and schemes (such as the Warm Home Discount), or to set up a payment plan.

These differ between every energy company, and if you have recently changed supplier you may need to reapply.

More information can be found at need to speak to somebody.

You can call the Citizens Advice Consumer helpline on 0808 2231133 (Freephone), open 9am to 5pm, Monday to Friday.

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