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What is the energy price cap and how high will bills go? What is the energy price cap and how high will bills go?
(32 minutes later)
UK households will find out how much their bills will increase when the new energy price cap is announced on Friday.UK households will find out how much their bills will increase when the new energy price cap is announced on Friday.
The average annual household bill for gas and electricity could reach £4,650 in January, when the cap is next reviewed, according to analysts Cornwall Insight.The average annual household bill for gas and electricity could reach £4,650 in January, when the cap is next reviewed, according to analysts Cornwall Insight.
However, plans to make energy cheaper for households who use less during peak times are expected in early September.However, plans to make energy cheaper for households who use less during peak times are expected in early September.
What is the energy price cap?What is the energy price cap?
The price cap is set by Ofgem, the energy regulator. It sets the maximum price that energy companies can charge households on a standard variable tariff for each unit of energy (kilowatt hour or KwH) they use.The price cap is set by Ofgem, the energy regulator. It sets the maximum price that energy companies can charge households on a standard variable tariff for each unit of energy (kilowatt hour or KwH) they use.
It's based on how much the companies have to pay the firms which produce electricity and gas, and is now reviewed every three months.It's based on how much the companies have to pay the firms which produce electricity and gas, and is now reviewed every three months.
Ofgem then calculates how much a household which uses the average amount of energy will have to pay over a 12-month period - assuming they pay by direct debt.Ofgem then calculates how much a household which uses the average amount of energy will have to pay over a 12-month period - assuming they pay by direct debt.
People who use comparatively more energy will pay more, while the bill will be cheaper for those who use less.People who use comparatively more energy will pay more, while the bill will be cheaper for those who use less.
Customers who don't pay by direct debit or who use prepayment meters pay more for the energy they use.Customers who don't pay by direct debit or who use prepayment meters pay more for the energy they use.
The price cap applies in England, Scotland and Wales, and is designed to protect consumers from short-term changes.The price cap applies in England, Scotland and Wales, and is designed to protect consumers from short-term changes.
Energy prices in Northern Ireland are controlled separately, but have also risen sharply.Energy prices in Northern Ireland are controlled separately, but have also risen sharply.
How high might bills go?How high might bills go?
In April, Ofgem raised the price cap by an unprecedented 54% - meaning the average bill rose to £1,971 per year.In April, Ofgem raised the price cap by an unprecedented 54% - meaning the average bill rose to £1,971 per year.
The average annual bill could go up to £3,554 when the price cap for October is announced, Cornwall Insight says. Last winter, the typical bill was £1,277.The average annual bill could go up to £3,554 when the price cap for October is announced, Cornwall Insight says. Last winter, the typical bill was £1,277.
It then expects the average bill to increase again in January, to £4,650, or £388 a month, compared to the current £164 a month.It then expects the average bill to increase again in January, to £4,650, or £388 a month, compared to the current £164 a month.
However, Ofgem has urged people to treat predictions of future price cap levels with "extreme caution".However, Ofgem has urged people to treat predictions of future price cap levels with "extreme caution".
What's the plan to encourage off-peak use?What's the plan to encourage off-peak use?
National Grid, which runs the UK's electricity system, plans to offer discounts to households which cut their electricity use at peak times.National Grid, which runs the UK's electricity system, plans to offer discounts to households which cut their electricity use at peak times.
Under its scheme, which is due to be announced in early September, households which avoid using items like tumble dryers, dishwashers and games consoles between 17:00 and 20:00 BST would get rebates for every kilowatt hour (kWh) of energy they save during this time.Under its scheme, which is due to be announced in early September, households which avoid using items like tumble dryers, dishwashers and games consoles between 17:00 and 20:00 BST would get rebates for every kilowatt hour (kWh) of energy they save during this time.
However, it's thought only households with smart meters will qualify, and it can take a few weeks to get one installed. According to the Centre for Sustainable Energy, tumble dryers use between 2 kWh and 3 kWh an hour. Ovens use about 2 kWh an hour. Dishwashers use between 1 Kwh and 1.5 kWh.
However, it's thought only households with smart meters will qualify for the National Grid's scheme, and it can take a few weeks to get one installed.
The Energy Saving Trust says several small changes to energy habits could also help, such as limiting your shower time and air drying your clothes.The Energy Saving Trust says several small changes to energy habits could also help, such as limiting your shower time and air drying your clothes.
Why is the energy cap so high?Why is the energy cap so high?
Energy prices rose sharply when lockdown was lifted and the economy returned to normal.Energy prices rose sharply when lockdown was lifted and the economy returned to normal.
They have also increased because the war in Ukraine has reduced supplies of Russian gas.They have also increased because the war in Ukraine has reduced supplies of Russian gas.
Europe is getting 90% less gas from Russia than it was this time last year, according to David Fyfe, chief economist at Argus Media, which advises energy companies.Europe is getting 90% less gas from Russia than it was this time last year, according to David Fyfe, chief economist at Argus Media, which advises energy companies.
This has pushed up the price of gas across the continent, including the UK.This has pushed up the price of gas across the continent, including the UK.
Gas and electricity producers raised their prices so rapidly that many energy suppliers collapsed.Gas and electricity producers raised their prices so rapidly that many energy suppliers collapsed.
Ofgem has been raising the price cap to try and ensure the remainder stay in business.Ofgem has been raising the price cap to try and ensure the remainder stay in business.
It says adjusting the price cap every three months, rather than every six months, will reduce instability.It says adjusting the price cap every three months, rather than every six months, will reduce instability.
What's the effect on customers?What's the effect on customers?
Fuel price rises are expected to pitch many people into fuel poverty.Fuel price rises are expected to pitch many people into fuel poverty.
Energy company E.on UK suggests one in eight households are currently struggling to pay their bills, and says 40% may be struggling by October.Energy company E.on UK suggests one in eight households are currently struggling to pay their bills, and says 40% may be struggling by October.
The NHS has warned that rising numbers of people will see their health worsen, unless the government takes further action to limit price rises.The NHS has warned that rising numbers of people will see their health worsen, unless the government takes further action to limit price rises.
The NHS Confederation said many people would have to choose between skipping meals or heating their homes.The NHS Confederation said many people would have to choose between skipping meals or heating their homes.
What help will I get to pay my energy bills?What help will I get to pay my energy bills?
All UK households will be given a one-off £400 discount on their fuel bills in October.All UK households will be given a one-off £400 discount on their fuel bills in October.
In addition, £650 will be paid to more than eight million low-income households who receive benefits or tax credits.In addition, £650 will be paid to more than eight million low-income households who receive benefits or tax credits.
There are further payments of £300 to pensioner households and £150 to individuals receiving disability benefits.There are further payments of £300 to pensioner households and £150 to individuals receiving disability benefits.
Vulnerable families can also claim help through the Household Support Fund, the Warm Home Discount scheme, and hardship funds run by energy companies.Vulnerable families can also claim help through the Household Support Fund, the Warm Home Discount scheme, and hardship funds run by energy companies.
How do I get the £400 energy grant and £650 cost-of-living payment?How do I get the £400 energy grant and £650 cost-of-living payment?
Ofgem: Getting help if you can't afford your energy billsOfgem: Getting help if you can't afford your energy bills
What happens if I don't pay my energy bills?What happens if I don't pay my energy bills?
Your supplier must give you a chance to clear your debt through an agreed payment plan.Your supplier must give you a chance to clear your debt through an agreed payment plan.
If you don't agree, you may be forced to move to a pre-payment meter.If you don't agree, you may be forced to move to a pre-payment meter.
In extreme cases, you might be threatened with disconnection.In extreme cases, you might be threatened with disconnection.
What can I do if I can't afford my energy bill?What can I do if I can't afford my energy bill?
How are you preparing for the rise in energy bills and cost of living? You can get in touch by emailing: haveyoursay@bbc.co.uk.How are you preparing for the rise in energy bills and cost of living? You can get in touch by emailing: haveyoursay@bbc.co.uk.
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