More than four million households on standard energy tariffs have been urged to submit meter readings before October 1 to avoid being charged inflated rates. The energy price cap will rise by 4% from Thursday for typical households across England, Scotland and Wales, coinciding with colder weather as many turn on their heating.
This increase means the average household paying by direct debit for gas and electricity will see their annual bill reach £1,723, an increase of £5 per month or £60 annually if maintained over a full year. Ofgem attributed the rise to elevated wholesale gas prices stemming from the continuing Middle East conflict, with unstable global markets remaining the primary factor behind price fluctuations.
Deadline for meter readings
Comparison website Uswitch has cautioned households without smart meters to provide readings to their energy supplier before the month ends to ensure they aren't billed at the higher rates for consumption prior to October 1. Households on standard tariffs with typical usage are projected to pay £145 for energy in October, up from £109 in September.
This substantial jump of a third results from both increased consumption due to colder conditions and elevated unit prices under the new price cap. Ben Gallizzi, energy expert at Uswitch.com, said: "Submitting a meter reading, if you don't have a smart meter, before or on Thursday October 1 will ensure the energy used is charged at the correct rates and not estimated by a supplier."
"That same deadline applies for the 15 million households on standard tariffs wanting to beat the hike entirely by locking in a lower-rate fixed deal before energy costs rocket for winter."
How the price cap works
Ofgem adjusts the price cap for households quarterly, predominantly influenced by wholesale energy market prices. The energy price cap was launched by the Government in January 2019 and establishes a maximum charge that energy suppliers can impose on consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy consumed. It doesn't cap total bills, as households continue to pay based on their actual energy usage.
Martin Lewis has said: "I would still get your phone out and take a picture of your meter today just in case of a future dispute, you don't need to do anything with it, you might want to email it to yourself so you've got proof." On the MSE website, the expert team also recommends: "The easiest way is to take a picture of your meters, so you have the readings to hand. Then you can log in to your online account and enter the readings."
October price cap increase details
According to Uswitch.com, more than four million households without smart meters must submit a meter reading before the end of the month to avoid being incorrectly charged for energy used prior to October 1. The energy price cap, which determines the maximum rates that households on standard tariffs can be charged, will rise by 4% from £1,663 to £1,723 for a typical household on October 1.
Homes on a standard tariff with average usage are expected to fork out £145 on energy in October, compared with £109 in September. The jump of a third is down to a combination of increased consumption and steeper rates during autumn, when central heating is fired up again. Without accurate and consistent meter readings, energy suppliers will be compelled to estimate usage before sending out bills. Those on standard tariffs who don't have a smart meter and neglect to submit readings on or around October 1 risk having part of their September usage wrongly billed under the newer, pricier rates.
Energy bills could soar even higher, with current predictions indicating that January's price cap will hit £2,117 – a whopping 23% increase from the October cap. This would represent the third successive rise and the steepest quarterly surge since the energy crisis began.
