economy
From ‘bill splitting’ to how to save £173
Top experts explain why 'tracker tariffs' are worth considering and whatever happened to the government's promise to slash bills by £150
TL;DR
- The Ofgem energy price cap is increasing by £60 to £1,723 per year for typical households from October 1.
- Households on standard variable tariffs (34 million) are affected, while those on fixed deals (11 million) are not.
- Experts advise locking into a fixed energy deal now to save potentially £100, with some deals offering savings of over £149 compared to the new cap.
- Tracker tariffs, which follow wholesale prices, can sometimes be cheaper than fixed deals but carry more risk.
- Gas unit prices are increasing significantly more than electricity unit prices due to volatile international markets.
- A £150 government cut to bills in April, achieved by shifting 'green taxes' to general taxation, has been effectively cancelled out by recent rises.
- Energy suppliers can increase monthly Direct Debits with 10 working days' notice; customers should monitor their own payments.
- If struggling to pay, consumers should first shop around for better deals, then contact their supplier for support or explore government assistance schemes.
- Combining gas and electricity with one supplier (dual-fuel) is generally cheaper due to administrative discounts, though splitting can be explored.
- Cornwall Insight forecasts a further 9% rise in energy bills in January, increasing the cap by £149 to £1,872.