The new cap means that the typical household in the UK will spend around £2500 a year on energy bills. However, those that use a lot of gas and electricity will pay more.
This means that the amount each household pays for each kilowatt hour of electricity (kW h) will rise from 28p to 34p.
Gas prices will go from 7p to 10p per kW h under the new price cap.
Just a year earlier gas had cost 4p per kW h for customers on the price cap and the charge for electricity was 21p.
Is it too late to submit a meter reading?
Ofgem instructed people to take a picture of their energy meters on and submit it to suppliers to avoid being charged at the higher rate.
However, a massive surge of people submitting readings caused problems with many suppliers, so the regulator stressed that people did not need to all submit their readings on Saturday.
“If you’re planning to submit your meter reading by October 1, you can submit it a reasonable time after,” the regulator said.
Energy prices have changed
The average direct debit unit rates for energy;
Unit rate 34.00p per kWh
Standing charge 46.36p per day
Unit rate 10.30p per kWh
Standing charge 28.49p per day
These are caps on unit rates (not a cap on total bills) & vary by region pic.twitter.com/CtH2sQ0WbX
— Ofgem (@ofgem) October 1, 2022
Number of households in fuel poverty has increased
Charities National Energy Action and the Food Foundation warned that the number of households in fuel poverty has increased from 4.5 million a year ago to 6.7 million now.
Dominic Watters, a single father in the south of England said that there is fuel and food poverty on his council estate, the charities said.
“The poor have been in a cost-of-living crisis long before the term was popularised and now these fuel price rises are driving us deeper into despair,” Mr Watters told them.
“When the electric is on emergency I live in a state of emergency, not knowing if I’ll be able to cook the food, boil the kettle, wash my daughter’s uniform or even have a shower.”
Laura Sandys, chairwoman and founder of the Food Foundation said: “For this winter, it may no longer be a question of heating or eating for many households; the cost-of-living crisis and energy bill increases will see children living in homes where there is no longer that choice – they will both go hungry and be cold.”
The Resolution Foundation think tank said that it was those in the leakiest homes that will struggle the most this winter.
The increase in bills will likely be twice as large for those in poorly insulated homes than for those that have energy efficient properties.
How to reduce your energy use?
Many households will be looking to offset the higher cost by reducing their energy use. But how can you do this and how beneficial can it be?
Jonathan Marshall, a senior economist at the think tank called on the Government to help people reduce their energy use in the long term.
“While the scale of support is hugely welcome, millions of households will remain exposed to unaffordable energy costs.
“People living in poorly-insulated homes will see bill increases this winter that are more than double that for families in well-insulated homes.
“And while the Government has made the right call on short-term intervention on prices, in the longer term incentives to reduce consumption will become increasingly important.”
Experts also say there are many other ways to reduce energy costs as we approach winter.
A simple way is to ensure the flow temperature of your condensing gas boiler is turned to its optimal level.
This will help the boiler operate more efficiently and turning down the thermostat will help you save money. This will not reduce the heat in your home if done so correctly but should only be done if the temperature inside remains safe.
Government support to help pay for energy bills
If you’re struggling with the rising cost of energy bills, government support is available.
Households will start receiving money off their energy bills from October, with the discount made in six instalments.
A discount of £66 will be applied to energy bills in October and November, rising to £67 each month from December through to March 2023.
Further Government support includes a £650 one-off cost-of-living payment for around eight million households on means-tested benefits.
🔔Energy prices will change tomorrow
Keep your supplier up to date by supplying a meter reading, but if you can’t get through, you can submit your reading a reasonable time after.
It might help to take a photo of the reading pic.twitter.com/AeuZoiiWi7
— Ofgem (@ofgem) September 30, 2022
Your Money Matters
Your Money Matters is a campaign launched by us and our sister titles across Newsquest to help you overcome the surge in the cost of living. This year has seen a whole host of household price increases — from the energy price cap rise to surging inflation and food prices — costing your family hundreds or even thousands of pounds extra per year. We’re making it our mission to look out for your cash, offering money-saving deals, competitions, giveaways and insightful stories from your community on the impact this cost-of-living crisis is having on our readers. The worldwide energy crisis exacerbated by the Ukraine invasion, the financial impact of the Covid pandemic, record inflation figures and a surge in the cost of goods, fuel and travel means we will all feel the pinch. Through our newspaper, we want to do what we can to help make your cash go further because we know your money matters.