Ofgem’s price cap will be rising by 6.4% from April 1, with the average dual fuel household paying by direct debit to see their annual energy bill increase from £1,738 a year to £1,849
Energy bills will rise by more than £100 for the typical household in the next few weeks, and households need to act or risk potentially being overcharged.
Ofgem’s price cap will be rising by 6.4% from April 1, with the average dual fuel household paying by direct debit to see their annual energy bill increase from £1,738 a year to £1,849. This is a rise of £111 a year or £9.25 a month according to Ofgem. The price cap for someone paying by pre-payment meter is also rising from £1,690 a year to £1,803, and the yearly charge for someone who pays on receipt of bill is going from £1,851 to £1,969.
April’s hike will be the third hike to the price cap in a row, after rising by 10% in October and a further 1.2% in January. The energy regulator blamed the increase on a spike in wholesale prices, along with an increase in policy costs and inflationary pressures. Ofgem updates its price cap every three months, so the new rates will remain in place until June 30, when it will then be revised again.
It’s important to remember that Ofgem’s price cap does not cap your energy bills. Your bill is still based on how much gas and electricity you use, as the Ofgem price cap limits what you pay for each unit of gas and electricity you use. So the more you use, the more expensive your bill will be and vice versa.
The price cap will also only impact households who are on a supplier’s standard tariff, which, according to Ofgem, is around 28million households. The standard tariff – which is also known as a “default” tariff – is what your supplier will put you on when your fixed rate comes to an end. These tariffs generally don’t have a fixed end date or early exit fee – but they do follow the price cap so they will rise when prices go up and drop when they come down.
If you are on a standard variable tariff, it is crucial that you submit a meter reading before the price cap changes. This ensures you are charged a lower rate for your energy before prices rise. Meter readings tell energy suppliers how much gas and electricity you’re using, and they are usually displayed as a row of numbers on your energy meter. These numbers dictate how much your energy bill will be.
If you miss the deadline to submit a meter reading, your supplier will give you an estimated bill. This bill is calculated based on how much energy you are forecast to have used, not what you have actually used. So in some cases, you could potentially be overcharged as your supplier may implement the higher charges for energy usage before the price cap rise.
The exact date you have to submit a meter reading depends on what supplier you are with. Some give you a few days after the price cap changes to submit a backdated meter reading, while other suppliers give you a week or more. This will be explained on their website. However, to be safe, it is best to try to get one before the change. It is often advised to take a picture of your meter, to have proof on when it was read. It’s worth noting that you don’t need to submit a meter reading if you have a smart meter or are a prepayment meter customer. If you do have a smart meter, check it is in “smart mode” as this will ensure you’re accurately charged.
How to take an energy meter reading
How you take your meter reading is dependent on the type of meter you have in your home. Firstly, houses which have a smart meter do not need to take a meter reading. This is because smart meters should automatically send the exact reading to your energy supplier. Although you can take a reading for your own peace of mind.
You will first need to find your energy meter. If you live in a house your meter will typically be located either under the stairs if you have cupboards or near the front door, possibly above the door or just next to it. It can also be found in a cupboard outside your home. If you live in flats, your meter can also be located in the corridors of your flat building alongside other resident’s meters. They will often have a flat number indicating the flat or apartment each meter belongs to.
For most standard meters, you’ll need to note down the first five numbers shown from left to right on your meter, then send this to your energy supplier. Some meters show red numbers, which you do not need to submit and can be ignored. If you have an Economy 7 meter, then you may see two different rows of numbers and you should note both of these rows down.
If you have a dial electricity meter, it is a little more difficult to take your reading. This meter has six dials from zero to nine and to take a reading you will need to take down the reading for the first five dials on the top row. You will need to read the digits from left to right and if the dial is between two numbers, you should round down to the lowest one. If the dial is between nine and zero then you will need to round down to nine.
If you are struggling to read your meter then you can find pictured step-by-step guides on the majority of energy providers websites. You can submit your reading either online through your energy account, over the phone, or through your energy provider’s app.
