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Why are gas bills so high and what's the energy price cap? Why are energy bills so high and when should I take a meter reading?
(30 days later)
Electricity and gas bills for a typical household will go up by £693 a year in April, a 54% increase. Millions of households in England, Scotland and Wales could be paying about £700 a year more for electricity and gas, following a price rise this week.
And there are fears the Ukraine crisis could lead to further increases from October. Energy experts are encouraging customers to take and submit meter readings before the change takes effect, in a bid to save cash.
How much will my energy bill go up?How much will my energy bill go up?
Around 18 million households on standard tariffs will see an average increase of £693 - from £1,277 to £1,971 per year. From 1 April, about 18 million households on standard tariffs will see an average increase of £693 - from £1,277 to £1,971 per year.
Around 4.5 million prepayment customers will see an average increase of £708 - from £1,309 to £2,017. Some 4.5 million prepayment customers will see an average increase of £708 - from £1,309 to £2,017.
The amount your bill will go up depends on how much energy you use.The amount your bill will go up depends on how much energy you use.
Energy bills won't rise immediately for customers on fixed rates, but many are likely to see a significant increase when their deal ends.Energy bills won't rise immediately for customers on fixed rates, but many are likely to see a significant increase when their deal ends.
Ofgem: Check if the energy price cap affects youOfgem: Check if the energy price cap affects you
What is the council tax rebate and what band am I in? Why are bills going up?
The government says it will offer extra help worth a total of £350via the council tax system.
In April people in council tax bands A to D in England will receive a one-off £150 discount.
Council tax bands are worked out differently across the UK, but about 80% of homes are in bands A to D. Typically, the more expensive the property the higher the band. You can check what band you are in on the government website.
In October customers in England, Scotland and Wales will receive a £200 rebate on their energy bills. They will have to repay this at £40 a year for five years, starting in April 2023
Other help is also being made available.
In England local authorities will also have access to a £150m fund to help lower income households living in higher council tax properties. It will also help households in bands A to D who already don't pay council tax.
The warm house discount scheme will be expanded, to cover three million households. It offers low income households a one-off annual discount on their electricity bill, and was worth £140 in 2021/22.
Because the council tax measures only apply in England, £565m will be given to other UK nations to fund equivalent help.
The Northern Ireland energy market is separate, but the government said £150m would be available to support households there.
Ofgem: Help with your energy bills
What is the energy price cap?
Bills are going up because the energy price cap - the maximum price suppliers in England, Wales and Scotland can charge households - is being raised.Bills are going up because the energy price cap - the maximum price suppliers in England, Wales and Scotland can charge households - is being raised.
Energy firms can increase bills by 54% when the new cap is introduced in April. Energy firms will be able to increase bills by 54% when the new cap is introduced on Friday 1 April.
Prices are expected to rise again in October, and a report by the bank Investec has warned bills could top £3,000 a year at this point, in part due to the Ukraine crisis. The price cap is reviewed every six months, and prices are expected to rise yet again in October.
A report by the bank Investec has warned bills could reach £3,000 a year.
Why might I need to read my gas and electricity meters?
Experts have been encouraging people without smart meters to submit gas and electricity meter readings on 31 March, the day before bills are set to go up - this Thursday.
This is so they can record the current, less expensive, rates for energy they've been using before the change takes place.
Justina Miltienyte, head of policy at Uswitch.com, says that while there is nothing you can do to reduce the cost of energy, reading the meter will ensure that bills are accurate: "It is always useful to keep your supplier updated regularly on how much energy you are using, but this is especially important before bills rise on 1 April."
Energy companies' phone lines, websites and apps might be quite busy as a result. If you can't submit your readings, you should take a photo with the meter reading clearly and meter serial number clearly visible.
How do energy prices affect the cost of living?How do energy prices affect the cost of living?
More households are expected to find themselves facing fuel poverty - meaning they spend a disproportionate amount of their income on energy. More households are expected to struggle because of bill increases.
The way fuel poverty is measured varies around the UK. The Resolution Foundation think tank expects the number of homes facing "fuel stress" across the UK to treble to 6.3 million, and says pensioners and people in local authority housing will be hit hardest.
In Scotland, a household is in fuel poverty if more than 10% of its income is spent on fuel and its remaining income isn't enough to maintain an adequate standard of living.
Based on this measure, the Resolution Foundation think tank expects the number of homes facing "fuel stress" across the UK to treble to 6.3 million after April. It says pensioners and people in local authority housing will be hit hardest.
It warns UK households are facing a "cost of living catastrophe".It warns UK households are facing a "cost of living catastrophe".
Food prices are also rising, and an increase in National Insurance in April will leave millions facing higher tax bills.Food prices are also rising, and an increase in National Insurance in April will leave millions facing higher tax bills.
The Bank of England has put up interest rates for the second time in three months to try and slow price rises. The Bank of England has put up interest rates for the second time in three months to try and slow price rises, but it expects that inflation, which tracks how quickly the cost of living changes over time, could hit 8%.
Why are prices rising so quickly?Why are prices rising so quickly?
Four things that are going up in price and whyFour things that are going up in price and why
What are interest rates and why do they matter?What are interest rates and why do they matter?
Why have gas prices gone up?Why have gas prices gone up?
A worldwide squeeze on energy supplies has pushed the price of gas up to unprecedented levels: A worldwide squeeze on energy supplies pushed the price of gas up last year.
a cold winter in Europe in 2020/21 put pressure on supplies and reduced the the amount of gas stored But wholesale prices have risen even higher since the invasion of Ukraine by Russia, which is the world's largest natural gas exporter
a relatively windless summer in 2021 made it difficult to generate wind energy The UK gets little of its gas from Russia directly, but prices could still be driven up worldwide if Russian supplies to Europe were affected.
increased demand from Asia - especially China - put pressure on liquefied natural gas supplies
wholesale prices have risen even higher following the invasion of Ukraine by Russia, which is the world's largest natural gas exporter
Although the UK gets little of its gas from Russia directly, if Vladimir Putin were to constrict supplies to Europe, it would drive up wholesale prices worldwide, including in the UK.
Warning UK energy bills could top £3,000 a yearWarning UK energy bills could top £3,000 a year
The UK is relatively hard-hit because about 85% of homes have gas central heating, and gas generates a third of the country's electricity. What can I do to save on fuel?
Why have energy firms collapsed?
When wholesale gas prices spiked, many energy suppliers collapsed - affecting millions of households.
This is largely because the energy price cap prevented them passing on all of their increased costs to customers.
When their supplier went bust many households were switched to a more expensive deal with another supplier.
What can I do if my energy supplier goes bust?
How can I protect myself from rising prices?
In the past, consumers have been encouraged to shop around when bills rise.In the past, consumers have been encouraged to shop around when bills rise.
But at the moment better offers - especially fixed deals - are not available. But at the moment better offers - especially fixed deals - are not available. People already on fixed deals are advised to stay put.
People already on fixed deals are advised to stay put. Otherwise, households are being encouraged to improve the energy efficiency of their homes.
Other households are being encouraged to improve the energy efficiency of their homes. The Energy Saving Trust says several small changes to our homes and habits could help many people off-set the rise in energy costs by about a third:
The Energy Saving Trust says simple changes to our homes and habits could offset the current price rises. switching lights off - £20 per year
keeping shower time to four minutes and swapping one bath per week for a shower - £35 per person per year
reducing your dishwasher or washing machine use by one run per week - £14 per year
What other help is available?
People struggling to afford energy bills can seek advice from charities such as Citizens Advice, Turn2Us or the StepChange debt charity.
All the big energy firms also have hardship funds that can offer assistance if someone is struggling to pay.
The government has said it will offer extra help worth a total of £350 via the council tax system in England too.
The warm house discount scheme will also be expanded to cover three million households. It offers low income households a one-off annual discount on their electricity bill, and was worth £140 in 2021-22.
In October customers in England, Scotland and Wales will receive a £200 rebate on their energy bills. They will have to repay this at £40 a year for five years, starting in April 2023.
The Northern Ireland energy market is separate, but the government has said £150m would be available to support households.