As customers face a “challenging” winter ahead with rising energy bills and cost of living, Ofgem will announce the new rise in the cap which sets the maximum amount that energy suppliers are permitted to charge per kWh. Under new rules introduced earlier this year, the energy price cap is updated quarterly rather than every six months.
Last week, during his Autumn Statement, the Chancellor confirmed that the energy bill for a typical household would rise to £3,000 in April from the current £2,500 under the Energy Price Guarantee.
Cornwall Insight consultants have predicted that the default tariff cap could be £4,245 a year in the first quarter of 2023.
In an email sent to customers, British Gas gave a “quick update” regarding the amounts that people pay each month.
They said: “Your energy prices are still protected.
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“You may have heard that the energy regulator, Ofgem, is going to announce the new energy prices this week – also known as the price cap.
“We understand that this is a challenging time with the cost of living continually increasing. So, we wanted to reassure you that this announcement won’t affect you right now.
“The Government’s current Energy Price Guarantee (EPG) will still be in place until March 31, 2023 and the Government has committed to continue to help households with their bills until April 2024.”
What is the price cap?
The price cap is set by Ofgem and limits the amount energy suppliers, like British Gas, can charge customers for each unit of gas and electricity, as well as a maximum daily standing charge.
On their website, they explain that one of the “simplest energy-saving tricks” is turning the heating down a single degree.
People might not think such a small amount would make a difference – but according to the Energy Saving Trust, going from 20C to 19C (for example) can cut the heating bill by 10 percent.
For the average three-bed house, that could be up to £145 every year.
Additionally, people can reduce their boiler flow temperature.
They said: “Got a combi boiler? The default boiler flow temperature is normally set at 70 degrees.
“Reduce it to 55-60 degrees to save up to six percent on your energy use.
“Your boiler will work much more efficiently, and you won’t even notice the difference. Sound complicated? It really isn’t!”