The government recently announced an energy price cap of £2,500 per year for two years, enabling millions of households across the UK to breathe a sigh of relief in the face of soaring gas and electricity prices. However, is this the highest you can expect to pay, or will your bills exceed this?
New Prime Minister Liz Truss recently revealed the energy price guarantee, which has frozen average household bills, after Ofgem decided to increase the energy cap to £3,549 from October 1st 2022, with further rises expected in January 2023.
While the news reassured billpayers around the country, many have been left confused whether they will still have to pay more than £2,500 a year.
For a start, the figure only refers to the estimated average household bill, which is considered to be a medium-sized house with two or three residents.
This is Money predicts a large home with up to five people will have to pay £3,471 a year instead.
Furthermore, the new energy price guarantee might not be relevant for those on fixed-price tariffs. Billpayers who managed to fix their prices before the recent price hikes will probably not see any change to their fees.
Those who fixed their bills at more than £2,500 per year, in anticipation of soaring prices, will be able to benefit from reduced tariffs to reduce bills by around £1,000. However, those who opted for fixed-price deals at more than £4,000 might find they end up paying more than those on standard variable tariffs, protected by the energy price guarantee.
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