Martin Lewis is urging all UK households to review their current energy tariff before October, as the Ofgem price cap is set to rise by 3.6% on October 1. The energy regulator confirmed the increase for the final quarter of the year, with a typical dual-fuel household forecast to pay £1,723 per year rather than the current £1,663.
Prepayment and bill payment increases
Prepayment meters are rising to £1,678 annually, while pay on receipt of bill will increase to £1,861 per year. The Money Saving Expert has now urged people to review their current tariff, with millions at risk of seeing their bills climb when the new energy price cap takes effect.
October review and winter impact
As reported by Yorkshire Live, Mr Lewis has warned the 3.6% rise does not paint the full picture, as the October price cap will remain throughout the cold winter months. He said those who rely heavily on gas could be hit the most.
According to the financial guru, average energy rates will be roughly 17% higher than they were in April. This means households could be facing more expensive bills, with gas households set to feel the sharpest pinch. The gas unit rate is set to jump by 8.7%, while the standing charge will increase by 2.2%.
Electricity users and fixed-rate advice
However, those who mostly use electric are set for a slight increase in their bills. Mr Lewis said the unit rate will rise by just under 1%, but the daily standing charge will drop by 4%.
Mr Lewis recommends people to explore more affordable fixed-rate deals if they face steeper bills from October. The cheapest is currently around 7% cheaper than the existing cap but, given the new rate will increase by 3.6%, it could work around 10% cheaper from October.
The Money Saving Expert website states: "Any increase in energy bills is bad news, but this hike is coming in before the winter months, when we generally use more energy. While October's 3.6% rise isn't as shocking as the 12.6% rise in July, it'll hit just as we enter the higher-use winter period, when our energy use tends to skyrocket – typically we use about 31% of our annual energy usage between October and December (compared to 14% between July and September)."
There are also concerns the price cap could increase in January due to "wholesale energy prices and global events". However, this situation remains largely uncertain at the moment.
