Energy Bills in 2019

Will they rise and why?

Energy Bills in 2019

We cannot predict the future, but it looks like the energy price cap will be rising this year. This will probably occur in February, after the cap is due to be first reviewed.

The CEO of Ofgem Dermot Nolan has stated that “wholesale costs have risen significantly over the past year. As a result it is likely we will announce an increase, potentially a significant one, on the level of the cap”.

The cap is reviewed twice a year (February and August) so we could, in fact, see another rise later in the year.^

 

Why will prices rise?

Wholesale energy prices are looking to rise this year, depending on a number of factors.

The cost of wholesale energy changes rather frequently, and has a knock on effect on consumer bills (and the price cap).

Things such as weather can impact prices - such as in 2018 when the ‘Beast from the East’  made prices soar up to 146%.

Wholesale rates can also fluctuate depending on supply and demand, as well as the strength of the pound, all of which are uncertain topics in the coming year.

You can compare and switch your energy HERE

 

How much could you energy bills rise in in 2019?

Given current wholesale prices, the energy price cap is expected to rise by £115 a year in April 2019.

Energy suppliers are expected to hike prices shortly thereafter, to be in line with the changed level of the price cap. But these are not the only factors which could affect energy bills in 2019.

More and more suppliers are going bust, meaning less competitive pricing in the energy market. Eight such suppliers went bust in 2018 alone. This means there is less incentive to  suppliers to undercut the prices of their competitors, so bills may increase in time.

The smart meter roll out is another factor which may potentially increase bills in 2019. The cost of engineers and technology are being passed onto the consumer. Suppliers also have very high installation targets to hit for smart meters.

 

What can I do to keep my bill low?

Thankfully, it’s simple to fix all of this. All you have to do is lock in a fixed energy deal as soon as possible. It only takes a few minutes, and you can have full confidence that your energy rates will stay low regardless of factors outside your control, such as cold weather or the energy market.

Our average customer saves £129* when they switch energy through energyhelpline. And the sooner you lock in a great deal, the sooner you can rest assured that you will be protected from any price hikes in 2019.

You can compare and switch your energy HERE

 

 Similar Articles:

- 2018 brought record amount of price hikes

- Ofgem announce changes to prevent further chaos

 

 

*Calculated against an average UK Big Six Supplier Standard Variable Tariff costing £1,137 a year. Usage for a typical home: Gas 12,000 kWh pa and Electricity 3,100 kWh pa. Payment Method: Monthly Direct Debit. Average savings figure based on all energyhelpline partner and own brand switches in 2018, as of 7 January 2019.

^Ofgem has stated that they used the wholesale prices of the Feb-July 2018 period for their initial Price Cap value, and will be using Aug 18 – Jan 19 period to determine the next value. Our analysis has estimated that wholesale prices (for an average usage household) will go up from £373 to £471 in that time, which is a 26% increase. The wholesale component of Ofgem’s Price Cap is £447 – and if it were to  increase by 26% that would result in a £118 increase, from £1,137 to £1,255. Data referenced: https://www.ofgem.gov.uk/system/files/docs/2018/11/decision_-_default_tariff_cap_-_overview_document_0.pdf

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