Energy regulator Ofgem has announced this morning (Friday, 26 August) that the energy price cap is set to rise from £1,971 to £3,549 from 1 October 2022.
The price cap, which is reviewed every three months, sets the maximum price that energy companies can charge households for each unit of gas and electricity they use. The unit is known as a kilowatt hour or kWh. The price cap doesn’t cap your total bill, which will depend on how much energy you actually use.
The price cap is expected to affect 24 million homes across England, Scotland, and Wales.
Will this affect me?
The energy price cap will apply to you if you are on a variable or default tariff, whether you pay by direct debit, standard credit or use a pre-payment meter.
If you are on a fixed-term energy tariff (a tariff with a fixed end date) or you have a standard variable green energy tariff, then the price cap will not apply to you.
When will this price increase happen?
The new rate(s) will apply from 1 October 2022.
Why are bills so expensive?
The two main reasons are Covid and Russia. When restrictions for the pandemic lifted, the economy started to spring back to life so the demand for commodities such as oil soared, which meant prices increased.
Russia is one of the biggest oil and natural gas producers and exporters in the world. They have been squeezing supplies of gas to Europe, which has meant prices have increased.
What support is available?
In April 2022, the government announced a series of additional financial measures to support households with the cost of living crisis. This included:
£400 energy bill payment - the £400 discount is administered by energy suppliers (not Karbon) and will be paid to customers over 6 months with payments starting from October 2022, to ensure households receive financial support throughout the winter months.
£650 cost of living payment – this was introduced to help people manage soaring inflation and rising food, fuel and energy bill prices. Those eligible for the payments include all families claiming one of seven means-tested benefits from the Department for Work and Pensions (DWP). These are: Universal Credit, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Pension Credit.
£300 extra cost of living payment - for eligible pensioners, on top of the Winter Fuel Payment in November / December.
£150 disability cost of living payment - for people on eligible disability benefits in September.
Will there be any more support from the government?
The government may give additional support but nothing is expected to be announced until a new prime minister has been appointed. Both Rishi Sunak and Liz Truss have not said what they will do about energy costs if they become prime minister.
Tips to save money on your energy bill
By making several small changes, you could help reduce your energy bills. Typical examples include:
- Switching off appliances rather than leaving them on standby
- Avoid using a tumble dryer
- Limit the time you spend in the shower
- Switch off lights if you don’t need them on
How will Karbon support me?
Here at Karbon, we’re committed to supporting customers throughout this cost of living crisis.
We’ve set up a working group to support customers and our Money Matters Team are experts in benefits and money advice and are helping customers to manage bills and budgeting, pay rent and access government grants and discounts.
Lee Forrest, manager of the Money Matters Team at Karbon Homes, said: “This announcement by Ofgem is devastating. It is going to affect so many people and we have to work together to ensure we can provide as much help and support as we can. A lot of customers have been getting in touch and are naturally worried about the increase. We don’t want customers sitting at home worried – please contact us and speak to us.”
For free, independent support, please call the Money Matters Team on 0800 164 0111 or email moneymatters@karbonhomes.co.uk
Energy regulator Ofgem has announced this morning (Friday, 26 August) that the energy price cap is set to rise from £1,971 to £3,549 from 1 October 2022.
The price cap, which is reviewed every three months, sets the maximum price that energy companies can charge households for each unit of gas and electricity they use. The unit is known as a kilowatt hour or kWh. The price cap doesn’t cap your total bill, which will depend on how much energy you actually use.
The price cap is expected to affect 24 million homes across England, Scotland, and Wales.
Will this affect me?
The energy price cap will apply to you if you are on a variable or default tariff, whether you pay by direct debit, standard credit or use a pre-payment meter.
If you are on a fixed-term energy tariff (a tariff with a fixed end date) or you have a standard variable green energy tariff, then the price cap will not apply to you.
When will this price increase happen?
The new rate(s) will apply from 1 October 2022.
Why are bills so expensive?
The two main reasons are Covid and Russia. When restrictions for the pandemic lifted, the economy started to spring back to life so the demand for commodities such as oil soared, which meant prices increased.
Russia is one of the biggest oil and natural gas producers and exporters in the world. They have been squeezing supplies of gas to Europe, which has meant prices have increased.
What support is available?
In April 2022, the government announced a series of additional financial measures to support households with the cost of living crisis. This included:
£400 energy bill payment - the £400 discount is administered by energy suppliers (not Karbon) and will be paid to customers over 6 months with payments starting from October 2022, to ensure households receive financial support throughout the winter months.
£650 cost of living payment – this was introduced to help people manage soaring inflation and rising food, fuel and energy bill prices. Those eligible for the payments include all families claiming one of seven means-tested benefits from the Department for Work and Pensions (DWP). These are: Universal Credit, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Pension Credit.
£300 extra cost of living payment - for eligible pensioners, on top of the Winter Fuel Payment in November / December.
£150 disability cost of living payment - for people on eligible disability benefits in September.
Will there be any more support from the government?
The government may give additional support but nothing is expected to be announced until a new prime minister has been appointed. Both Rishi Sunak and Liz Truss have not said what they will do about energy costs if they become prime minister.
Tips to save money on your energy bill
By making several small changes, you could help reduce your energy bills. Typical examples include:
How will Karbon support me?
Here at Karbon, we’re committed to supporting customers throughout this cost of living crisis.
We’ve set up a working group to support customers and our Money Matters Team are experts in benefits and money advice and are helping customers to manage bills and budgeting, pay rent and access government grants and discounts.
Lee Forrest, manager of the Money Matters Team at Karbon Homes, said: “This announcement by Ofgem is devastating. It is going to affect so many people and we have to work together to ensure we can provide as much help and support as we can. A lot of customers have been getting in touch and are naturally worried about the increase. We don’t want customers sitting at home worried – please contact us and speak to us.”
For free, independent support, please call the Money Matters Team on 0800 164 0111 or email moneymatters@karbonhomes.co.uk
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