More than four million households on standard energy tariffs have been urged to submit meter readings before October 1 to avoid paying higher prices. The energy price cap will rise by 4% from Thursday for a typical household in England, Scotland and Wales, just as cooler temperatures lead many to switch on central heating.
The increase will see the energy bill for the average household paying by direct debit for gas and electricity reach £1,723, up £5 a month or £60 a year if sustained over 12 months. Ofgem said the increase reflected higher wholesale gas prices due to the ongoing conflict in the Middle East, with volatile global markets remaining the dominant driver of price changes.
Uswitch and Martin Lewis urge meter readings
Comparison site Uswitch warned households without smart meters to send readings to their supplier by the end of the month to avoid being charged higher rates for energy used before October 1. Homes on a standard tariff with average usage are expected to spend £145 on energy in October, compared with £109 in September. The increase of a third is down to a combination of increased usage due to cooler temperatures and higher unit rates under the latest 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 changes the price cap for households every three months, largely based on the cost of energy on wholesale markets. The energy price cap was introduced by the Government in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use. It does not limit total bills because householders still pay for the amount of energy they consume.
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 team of specialists also advise: "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 increase and January forecast
According to Uswitch.com, more than four million households without smart meters need to submit a meter reading before the end of the month to avoid being billed at incorrect rates for energy consumed prior to 1 October. The energy price cap, which sets the maximum rates households on standard tariffs can be charged, will increase by 4% from £1,663 to £1,723 for a typical household on 1 October.
Homes on a standard tariff with average usage are expected to spend £145 on energy in October, compared with £109 in September. The rise of a third is attributable to a combination of greater consumption and higher rates during autumn, when central heating is switched back on. Without precise and regular meter readings, energy suppliers will be forced to estimate usage before issuing bills. Those on standard tariffs who do not have a smart meter and fail to submit readings on or around 1 October risk having a portion of their September usage incorrectly billed under the newer, costlier rates. Energy bills could climb even further, with current forecasts suggesting January's price cap will reach £2,117 – a staggering 23% rise from the October cap. This would mark the third consecutive increase and the largest quarterly leap since the energy crisis.
