Martin Lewis' Money Saving Expert (MSE) team has issued a simple message after it was revealed that household bills across the United Kingdom will be going up in autumn and winter by almost £150.
Ofgem, which regulates the energy industry in the UK, announced today (23 August) that the average household bill was going to increase as it rose the price cap for homes.
It is bad news for Brits with winter now only around the corner but Ofgem says it is necessary due to increased political tensions around the world combined with extreme weather events.
The regulator announced it is hiking its price cap by 10 percent from the current £1,568 for a typical household in England, Scotland and Wales to £1,717.
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It is around £117 cheaper than the cap in October last year, though, which was £1,834.
Despite the year-on-year fall, the increase going in to the colder months will be a bitter pill for millions of Brits after a summer where prices were at a low while many weren't using their central heating systems due to the mild weather.
Millions of pensioners are also facing a winter with less support after the new Labour government scraps winter fuel payments for those who do not receive pension credits or other benefits.
About 10 million pensioners will miss out on the payments of up to £300 this year.
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Jonathan Brearley, chief executive of Ofgem, said: “We know that this rise in the price cap is going to be extremely difficult for many households.
“Anyone who is struggling to pay their bill should make sure they have access to all the benefits they are entitled to, particularly pension credit, and contact their energy company for further help and support.”
Following on from the announcement Martin Lewis' MSE team issued how the price cap increase will impact you.
"The Price Cap changes every three months, and is set to rise from October due to higher wholesale energy prices in recent months" MSE said.
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"Here's what the Cap will be set at from 1 October. If you pay by monthly direct debit, it's £1,717 a year on average for a typical dual-fuel household, affecting all those on standard variable tariffs (essentially everyone not currently on a fix). This is a rise of 10 percent.
"If you prepay for your energy, prices will rise by 10 percent to £1,669 a year.
"If you pay on receipt of a bill, it's a 10 percent rise to £1,829 a year."
It's very easy to get lost in the numbers behind the energy price cap, as the big number isn't a guarantee of what you'll pay. Rather, it all comes down to usage and that's what the message from the MSE is.
"Remember, it's the rates that are capped, so use more and you pay more," they said.
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Energy Secretary Ed Miliband said the announcement 'will be deeply worrying news for many families'.
He blamed the price cap hike on the 'failed energy policy we inherited, which has left our country at the mercy of international gas markets controlled by dictators'.
He said: “We will also do everything in our power to protect bill payers, including by reforming the regulator to make it a strong consumer champion, working to make standing charges fairer, and a proper Warm Homes Plan to save families money.”
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Topics: Martin Lewis, Money, UK News, Cost of Living
Tom Earnshaw