Ofgem has today announced that from 1st October 2021, the energy price cap for those on default tariffs will increase by £139 from £1,138 to £1,277.
For the 11 million consumers who currently receive their gas and electricity this way, the new energy price cap could unfortunately result in more expensive bills.
It presents a new maximum amount that your supplier can charge you and it’s expected that many will officially confirm price hikes over the next few weeks.
Similarly, the price cap for those on prepayment tariffs has also increased by £153 taking it from £1,156 to £1,309.
This price cap increase is the result of a huge 50% surge in the wholesale cost of energy over the last six months as the world emerged from lockdown. Gas prices in particular, have hit a record high.
The news that your energy bills could increase may sound worrying, but don't panic. You can secure a great-value price for your gas and electricity and help to avoid future price increases by switching with Energy Helpline.
Tom Lyon, director of energy at energyhelpline.com, said:
“Significantly increasing energy prices to their highest ever level, just before we head into winter is a body blow to the 11 million households on poor value standard variable tariffs.”
“The news is even worse for those on prepayment meters, who will now on average pay nearly £110 a month for their energy.”
“Energy companies will argue their margins have been squeezed and they are losing money due to the rapid rise of wholesale costs this year, however, these complaints should fall on unsympathetic ears as most households pay through the nose for their gas and electricity.”
“Despite this increase to the default tariff, consumers on fixed deals are unaffected and switching to a competitive fixed tariff will lower your monthly outgoings and avoid today's price hike.”
“Switching today can save you around £250 compared to the new price cap level due to come in this autumn."