Energy costs will increase by 2 percent starting in October for an average home in England, Scotland, and Wales,
Ofgem
revealed today.

The hike implies that a family consuming an average level of gas and electricity will now spend £1,755 annually, representing an increase of £35 per year compared to the present tariff.

Household energy bills are expected to rise by approximately £2.93 each month — resulting in an average home on a standard rate paying £102 instead of the current £100 monthly.

A price ceiling – an automatic fee for individuals without a set-rate plan – establishes a limit on the cost per unit and monthly charges that providers may apply to consumers’ electricity usage.

Recent data indicates that over a third of clients (37 percent) are currently on fixed-rate plans, ensuring them protection against the imminent increase.

Tim Jarvis, head of markets at Ofgem, stated: “Although there is still work remaining, we are observing indications of a more robust marketplace.”

There are more individuals on fixed
tariffs
They are saving their own money, with more choices available for switching, and we have observed higher levels of customer satisfaction along with fewer complaints.

‘Still, the current adjustment is under’
inflation
We understand that customers may be experiencing financial strain. However, there are steps you can take—opting for a fixed-rate plan could potentially save over £200 compared to the new limit.

Using direct debit or smart pay-as-you-go methods might help you save cash as well.

In the long run, we can expect variations in our energy costs until we become protected from unpredictable global gas markets. This is why we keep collaborating with authorities and the industry to expand our range of energy sources, thereby decreasing dependence on markets beyond our influence.

Simon Francis, head of the End Fuel Poverty Coalition, stated: “The 12 million families currently facing fuel poverty will be among those most affected by the upcoming increase in the price ceiling.”

It indicates that typical electricity and gas charges will stay extremely expensive, adding hundreds of pounds annually compared to the winter season of 2020/21.

Amidst the details of the announcement lies a 14 percent rise in gas fixed fees, with gas cost per unit still nearly twice as high as before the crisis.

And the price of electricity has increased as well, with this rate determined by the expense of the priciest generating source, typically gas-powered plants.

His group advocated for “immediate changes to address the flawed pricing structure, actions to guarantee families receive focused assistance for chilly homes, a countrywide initiative for insulation and air circulation, revisions to energy trading regulations, and reduced fixed fees.”

More to follow

Read more

• Are rising energy costs push families to endure cold winters or look for different options as Ofgem introduces a disputed limit on prices?
• Energy Price Hike Alert: What Will the Third Straight Increase Mean for Your Budget This April?
• Will your electricity bill increase by £149 this October because of Ofgem’s rise in the maximum tariff?
• Are your electricity costs set to jump sharply with Ofgem’s new rate limit causing an enormous increase of £149 from now on?
• Are British households set for an additional economic burden as their energy costs in January exceed predictions, despite optimism that Ofgem’s price limit might decrease?