Wednesday, July 6, 2022
HomeMillennial MoneyThe energy price cap goes up today

The energy price cap goes up today


Today, the energy rate cap rises by 54%! 😲

You’ll have already received your energy bills in the past few weeks, and hopefully started taking action.

Our energy bills are getting pricier mostly because of a huge rise in the raw cost of gas, known as its wholesale price. We’re still quite heavily reliant on gas in this country even as we try to move over more to renewable energy, and we’re also very dependent on gas supplied from other countries.

Even before the current conflict in Ukraine, we were seeing problems with energy supplies across the world due to disruptions caused by Covid-19 lockdowns. Now, we could see gas supplies to Europe restricted by Russia as part of this latest conflict, and whilst the UK doesn’t get much gas directly from Russia, we will still be affected.

All this forced the energy regulator, known as Ofgem, to raise the maximum amount that people will be charged on a default energy deal if they use the average amount of energy. This is known as the energy price cap (or as I prefer to call it, the rate cap).

It’s already gone up 54% to £1,971. But your energy bills might go up even more if you’re using more than the average amount of energy and if you’re using a prepayment meter rather than paying your bills by direct debit. Also, if you come off fixed rate energy deal at some point this Spring, you’ll find that you’ll have to pay a lot more than what you’ve been used to.

Unfortunately, energy prices could go up even further in the Autumn if conflict in Ukraine doesn’t go away and the wholesale price of gas remains high. Some energy experts reckon the price cap could even go above £3000.

The silver lining here is that Spring is here, so warmer weather is on the way. Still, now more than ever, you’ve got to be smart about how much energy you use:

🔥only boil as much water as you need in the kettle (that’s a big one for me as a tea addict!)

🔥turn off lights off when you leave a room 

🔥don’t leave the heating on at high temperatures all day if it’s not necessary.

In other words, turn down thermostat…stat!

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