The team at Martin Lewis’ MoneySavingExpert.com is encouraging households to take an energy meter reading as Ofgem’s price cap is set to increase tomorrow. From January 1, the price cap for a household with average energy usage paying by direct debit will go up from £1,717 annually to £1,738.
Your bill may vary depending on your actual energy consumption. For those subject to the price cap, which applies if you’re not on a fixed energy deal and if you don’t have a functioning smart meter, MSE suggests submitting a meter reading in the coming days. This measure can help ensure you’re not overcharged for energy used prior to the cap change.
Smart meter users should be exempt from providing readings, assuming their device operates correctly.
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In their most recent email blast, MSE highlighted: “It’s Meter Reading Week. If you’ve not got a WORKING smart meter, aim to give an up-to-date meter reading within a few days either side of 1 Jan, reducing the risk that your supplier estimates that you’ve used more at the new higher rate than you have.”, reports the Mirror.
They also invite customers to consult their guide on how to take a meter reading. Despite its name, the ‘price cap’ doesn’t cap total energy expenditures but sets maximum charges per unit of gas and electricity, along with a maximum daily standing charge for grid connection.
Ofgem revises its price cap every three months, meaning the new figure will stay in place until April, when it will be reassessed. Regrettably, experts at Cornwall Insight anticipate that the Ofgem price cap will surge by nearly 3% next spring, reaching £1,738 a year.
A staggering 26 million people are subject to the price cap. You fall under the price cap if you’re on a standard variable rate (SVR) tariff – often referred to as a default or variable tariff.
These are typically individuals who aren’t tied into a fixed deal, or those who didn’t switch to a new tariff when their previous one expired.