Energy bills will rise by £35 from October 1st as Ofgem confirmed the price cap increases from £1,720 to £1,755 annually. The two per cent increase will particularly impact lower energy users due to rising daily standing charges on gas and electricity.
Consumer champion Martin Lewis urged households still on standard tariffs to secure fixed deals before the new price cap takes effect. He explained: "Now we know the Cap will be at the current rate or higher until at least the end of the year, it's easy to compare to the cheapest fixes."
Current fixed deals average nearly 17 per cent less than the October price cap rate, equivalent to around £250 cheaper per year on a typical bill. Lewis added that fixed deals have "guaranteed rates, so you know they won't rise for at least a year".
Standing charges hit hardest
The average standing charge rises 4.5 per cent for electricity users and 14 per cent for gas users. Lewis warned this creates a "horrific £320 per year just for having the facility of gas or electricity even if you didn't use it".
According to The i, £17 of the £35 increase comes from a nine per cent rise in policy costs, primarily from expanding the Warm Home Discount Scheme. The Scotsman reports that grid balancing costs add £1.23 per month to average household bills due to renewable energy challenges.
Lower energy users face effective rises of five per cent or more, while high gas users may see increases of just one per cent. Lewis called this a "moral hazard" especially affecting "many older people who only use their gas in winter".
Essential switching guidance
The price cap covers customers paying by standard credit, Direct Debit, prepayment meter, or Economy 7 meter. Price forecasts suggest a slight drop in January followed by a five per cent rise in April, making current fixed deals attractive until next summer.
Advice Direct Scotland outlined seven key considerations before switching suppliers. Senior project lead Hazel Knowles said: "Switching suppliers can be beneficial for some people, but it depends on the circumstances, and it is important to consider all the options before rushing into anything."
Seven-step switching checklist
Customers should first understand their current plan by reviewing annual energy consumption and tariff type. Research using Ofgem-accredited comparison tools remains essential, considering both unit rates and standing charges.
Key eligibility checks include ensuring new suppliers participate in schemes like the Warm Home Discount and verifying smart meter compatibility. Customers can switch with debts under 28 days old, while prepayment users can switch owing up to £500 each for gas and electricity.
The switching process typically takes 21 days with a 14-day cooling-off period. Customers should check for early exit fees and remain vigilant against scams, avoiding unsolicited phone or door offers.
Sources used: "Daily Record", "The i", "Scotsman" Note: This article has been edited with the help of Artificial Intelligence.
