Energy regulator Ofzem has warned that household energy prices will rise significantly next spring.
Here are all the details about the warning of price increase and six important steps to prepare you and your home for this incoming cost.
What are the warnings of Ofgem’s energy price increase?
According to the BBC, Ofzem chief executive Jonathan Brearley has confirmed that we are all scared of the news. After the recent price hike, energy prices are set to rise again next spring due to the unprecedented improvement in gas prices.
I don’t know about you, but I’m pretty sick of the word ‘unprecedented’ these days!
How much will the price of energy increase?
It is unknown at this time what he will do after leaving the post. Some estimates suggest that an average customer may pay an additional-400- £ 600 per year.
The full details will be decided by Ofzem in February 2022. But the changes will not take effect until April 2022.
So the good news is you have plenty of time to move forward with these significant changes.
How can you be prepared for rising energy prices?
In such a situation, we are never completely helpless. Cap increases on prices are out of your control, but there is still much you can do to limit losses. You need to go through six important steps before an energy price increase can take effect:
1. Check your current tariff
Spend a little time looking at your energy use and the tariff you are on.
Depending on your usage, it may be understandable to stay with your existing supplier but switch to another tariff which is cheaper.
This will add some homework to your part, but a quick review can save you loads in the long run.
2. Compare suppliers
The choice of your supplier will depend on where you live. But from time to time it is always worth shopping and comparing the value of your energy with other deals in the market.
Keep in mind that some agreements will not reflect upcoming changes because they have not yet been made.
However, making sure you are in the cheapest plan now means that future cost increases will have less of an impact on your finances.
3. Consider a specific duty
Some providers will allow you to stop paying a certain rate for a certain period of time.
Having a fixed price helps you budget better and ensures that you are not harmed by unexpected energy price changes.
Doing so can also be a good way to ensure a fair price. However, without knowing exactly how much the upcoming increase will be, it is difficult to determine what a good offer looks like.
4. See if you are eligible for support
There are reports that these changes could make another 1.5 million people unable to pay their energy bills next year.
If you are struggling financially, you may be able to get government assistance.
It is always worthwhile to check if you can get any extra help with paying high energy bills.
5. Prepare your budget
If your finances are tight, try budgeting to prepare for a price increase. If you are unable to reduce your bills, you may have to cut elsewhere.
This is not ideal but it is better to take action now or withdraw money in advance. When April comes you don’t want to see yourself at the financial peak.
6. Reduce your usage
This may seem like an obvious and I ended it for good reason.
You are already doing what you can to reduce your billing costs. But as the price of this energy increases, it is more important than ever to consider your use.
Reduce how much power you are using where possible and make sure you have no leaks, insulation or faulty devices draining your supply.
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