Energy regulator Ofgem raised its energy price cap to £1,971 on April 1 (except in Northern Ireland), which means your energy bills have probably already grown.

Why are energy prices rising?

The price rise has been caused by an increase in wholesale gas prices (the amount that energy firms pay), which have seen a steep rise since October 2021. Gas prices have hit a record high as the world emerges from lockdown as well time as other economic factors having an impact.

This means that changes in wholesale prices are passed on to households through rising energy bills. The energy price cap only affects you if you live in England, Wales or Scotland. In Northern Ireland, energy prices are governed by the Utility Regulator. 

What happens if my energy supplier goes out of business?

While it’s rare for a big energy supplier to go bust, lots of small energy companies have gone bust over the past few months.

If this happens, the ‘Ofgem safety net’ makes sure you aren’t left without energy. The safety net moves you automatically to a new energy supplier, onto a new deal.

If your energy supplier has stopped trading, it’s important to sit tight, don’t switch and wait until your new provider contacts you. Your new supplier will be chosen by Ofgem, which can take several weeks. This process could take longer if you were with a larger supplier like Bulb, but they should still be in touch to keep you updated.

What if I owe money or am in credit and my supplier goes bust?

Any credit on your account will be protected. The balance is transferred to your new supplier, who will pay you any outstanding credit – minus any energy you have used but not been billed for. 

It’s important you don’t switch tariff or supplier until your account is moved to the new supplier. You might find it harder to get any money you’re owed if you switch before this happens.

If you owe money and your supplier goes bust, your debt will be transferred to the new provider and you’ll still have to pay.

Should I switch suppliers for a cheaper deal?

If your fixed deal has come to an end or you’ve been moved to a new supplier, it’s tempting to look for a new energy company where you can make savings. Unfortunately, no fixed deals are being offered for less than the energy price cap at the moment, so you won’t cut your bills by switching.

The energy cap is expected to rise again in October 2022, so you’ll need to be ready to review what you’re paying again to see if it’s time to switch. Ofgem has warned the energy price cap could rise to around £2,800, an increase of over £800 on the current limit.

What help is available for rising bills?

There are a few government schemes you may be eligible for to help soften the impact of increased costs of living.

Energy Bills Support Scheme

All domestic energy customers in England, Scotland and Wales will get £400 off their energy bill from October 2022. That’s an extra £200 on top of the £200 offered back in March. You will no longer have to pay this money back.

If you pay your bills by Direct Debit or credit, the money will be credited to your account.

If you have a pre-payment meter, the money will be either added to your meter or you’ll get a voucher to use for top-ups.

If you live in Northern Ireland, you’ll get equivalent support.

£650 one-off Cost of Living Payment

If you’re on means-tested benefits you’ll get a £650 cost of living payment, paid in two instalments alongside your existing benefits. The first instalment is due to be paid in July 2022 and the second in the autumn. The payment will be tax free, won’t count towards the benefit cap and won’t affect your eligibility for any other benefits you’re getting now.

You’re likely to qualify if you’re getting any of these benefits:

• Universal Credit
• Income-based Jobseekers Allowance
• Income-related Employment and Support Allowance
• Income Support
• Working Tax Credit
• Child Tax Credit
• Pension Credit.

One-off £300 Pensioner Cost of Living Payment

All pensioner households receiving the winter fuel payment will get an extra £300 on top of their annual payment. This should be paid to you automatically into your bank account in November or December 2022. You don’t need to claim it.

This payment won’t affect any benefits you’re already getting and will be paid alongside other support you might qualify for, such as the £650 cost of living payment if you’re getting Pension Credit.

£150 Disability Cost of Living Payment

You’ll get an extra £150 paid to you in September 2022 if you’re getting any of these disability benefits:

• Disability Living Allowance
• Personal Independence Payment
• Attendance Allowance
• Scottish Disability Benefits
• Armed Forces Independence Payment
• Constant Attendance Allowance
• War Pension Mobility Supplement.

The payment will be tax-free, won’t count towards the benefit cap and won’t affect any other benefits you’re getting now.

It will be paid on top of the £650 cost of living payment you may also qualify for if you’re getting certain means-tested benefits, such as income-related Employment and Support Allowance.

To view our Article ‘Saving On Gas & Electricity’ click here!