MSE News: Energy bill hikes hit millions as price cap rises by an average £139/yr

MSE_Andrew

Around 11 million households on standard tariffs will see energy bills jump by a typical £139/year as the new price cap kicks in today. But due to the extreme situation in the energy market, with wholesale prices at record highs, there are now no deals cheaper than the new price cap.

Read the full story:

'Energy bill hikes hit millions as price cap rises by an average £139/yr – but there are no cheaper deals to switch to right now'

If you haven’t already, join the forum to reply.

filbertfox

Hi all
I think the least the government can do is scrap VAT on home fuel bills.
its only 5% but that can make a big difference.
In principle I don't think VAT should be charged on home fuel.
has Martin Lewis or anyone campaigned to change this?

daveyjp

No need for Martin Lewis.  The PM and his Cabinet member think the VAT on domestic fuel is "unfair and damaging.

https://www.independent.co.uk/news/uk/politics/we-can-scrap-vat-energy-bills-if-we-leave-eu-say-johnson-and-gove-a7057146.html

QrizB

daveyjp said:

No need for Martin Lewis.  The PM and his Cabinet member think the VAT on domestic fuel is "unfair and damaging.

...which probably means they're going to increase it

Aylesbury_Duck

filbertfox said:

Hi all
I think the least the government can do is scrap VAT on home fuel bills.
its only 5% but that can make a big difference.
In principle I don't think VAT should be charged on home fuel.
has Martin Lewis or anyone campaigned to change this?

I'm not sure I agree, but I am in the fortunate position of being able to afford increased bills, no matter how unwelcome.  In an era where tackling environmental problems and reliance on fossil fuels is needed, shouldn't energy be taxed?  I think there are other things the government could be doing to alleviate the financial burden of those who will struggle with increased energy bills, but removing the tax on something all people use - including those with the means to use energy as they see fit - seems the wrong move in the circumstances.

GrahamB

Sorry for being really thick, but I just don't understand how the price cap works  .  How do I work out what the £1277 per year equates to in KWh for both Gas and Electric to see if we fit into the stereotype of being  'a typical user' or am I barking up the wrong tree ????

Bubba_Shaboo

It’s not totally straightforward. Copied from another thread https://forums.moneysavingexpert.com/discussion/6299083/understanding-ofgem-price-cap/p1

zagfles said:

DeletedUser said:

Again, from the tables provided by OFGEM, the capped price for 12000kwh of gas, and 2900kwh of lec appears to defined, and therefore the unit price is also capped?

https://www.ofgem.gov.uk/sites/default/files/2021-08/Default tariff cap level - 1 October 2021 - 31 March 2022.pdf

It's 3100kwh for electric.

So AIUI, take gas, "other payment method" (assume that includes DD), and North West region

Max SC (ie nil kwh) = £90.81 a year, ie 24.879p/day

Max total for 12,000 kwh = £552.92

If supplier sets max SC, then max unit rate = (552.92-90.81)/12000 = 3.8509 p/kwh

If supplier sets zero SC, then max unit rate = 552.92/12000 = 4.6077 p/kwh

If supplier sets SC somewhere between zero and max, the max unit rate will be somewhere between the above and can be worked out as (552.92 - annual SC)/12000

Maddiemoo

I don’t understand that if the price cap means the average bill increases by £139 per year, why my supplier wants to increase my £139 d/d by £70 per month when I am £330 in credit. I understand we use more energy in the winter months but can this really be right that my annual bill is going up by £800 a year?! 

ItsComingRome

Maddiemoo said:

I don’t understand that if the price cap means the average bill increases by £139 per year, why my supplier wants to increase my £139 d/d by £70 per month when I am £330 in credit. I understand we use more energy in the winter months but can this really be right that my annual bill is going up by £800 a year?! 

Your payment is going up £800, not necessarily your bill.

QrizB

Maddiemoo said:

I don’t understand that if the price cap means the average bill increases by £139 per year, why my supplier wants to increase my £139 d/d by £70 per month when I am £330 in credit. I understand we use more energy in the winter months but can this really be right that my annual bill is going up by £800 a year?! 

Who is your supplier? Are they one of those that charges "six up, six down" seasonal DDs where you pay 2/3rds as much in the summer and 4/3rds in the winter? If so, a £70 increase in October after £139 in September sounds about right.

Ultrasonic

GrahamB said:

Sorry for being really thick, but I just don't understand how the price cap works  .  How do I work out what the £1277 per year equates to in KWh for both Gas and Electric to see if we fit into the stereotype of being  'a typical user' or am I barking up the wrong tree ????

I'd suggest forgetting about the cap and the change to this. Are you on a fixed or variable tariff? If fixed then nothing has changed for you. If variable then you can work out the the difference to you by looking at how the tariff costs have changed, and using your actual kWh usage to calculate costs.