Energy industry experts have issued new price cap predictions for electricity and gas bills. It’s not good – the increase will not only happen in October.
Until April 2022, many UK residents didn’t even know what the price cap was. So we explain – in a nutshell, it’s the cap that energy suppliers must adhere to when setting unit rates per kWh of electricity or gas.
In April, the said limit increased significantly – it is now close to £2,000 per year for so-called typical consumption. However, this does not mean that suppliers cannot charge you a higher bill – the cap is only imposed on a per unit rate.
In late May/early June, Ofgem issued an announcement predicting that the price cap would increase again in October. At the time it was said to be around £2,600 per annum.
Turns out it’s going to get a lot worse… According to MoneySavingExpert, there is now talk of a price cap increase to £3240 per year! That’s an astronomical increase.
That’s not all. From 2023, the price cap is to be changed quarterly, rather than every six months as at present. This means that as early as January, another increase is being prepared – this time by around £150.
As recently as May, experts were predicting a reversal of the trend from April 2023, with prices falling significantly. It was even predicted that they would return to the norm from the end of 2021.
None of this. The price cap is now expected to fall minimally. The bill amount for the year will therefore still be significantly higher than at present.
It has even been calculated how much more we will pay each month. You’d better sit tight…
If you currently pay around £50 for energy (which is achievable in the summer), you will pay £85 after the changes. It will be much worse in winter.
With typical consumption of £150 at current rates, under the new price cap you will pay as much as £250. The less frugal, who were previously paying £300 each during the winter, have to prepare themselves for an expense of half a thousand pounds every month!