Millions of households have been warned to prepare for yet another increase to energy bills. Charges only went up in January and are now set to spike again in April.
It’s because of the Energy Price Cap, which is changed every three months and determines how much typical households pay. Annual bills are set to increase by up to 5% or £87.
It will pile yet more strain onto household budgets, with council tax and water bills also due to go up over the coming months. People have been told there is still time to avoid the increases by choosing a fixed tariff to keep their bills at the same rate for a certain period.
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Fixed tariffs sometimes come with risks as they lock your bills and average costs could come down, leaving customers paying more. But experts say charges are expected to remain high this year, so fixing makes sense.
Martin Lewis explained: “The Price Cap isn’t a total cap on what you pay, it’s a limit on the daily charge and unit cost of energy, so use more, pay more. Most firms charge at the limit, and these limits are high now, meaning the Price Cap is a pants cap, as most can easily compare and switch to a cheaper deal.
“Unsure if you’re on a Price Capped tariff? You likely are, as eight in 10 homes are, everyone other than those already fixed or who’ve actively chosen a special deal. Move to the cheapest fix and within five working days you’ll be paying typically 7% less than what those on Price Capped tariffs pay.
“Plus, the rate is locked in so you get peace of mind that it won’t change, whereas the Price Cap’s predicted to rise further.”