Ofgem has announced its energy price cap is rising again this winter – here is how you can combat the increase and what help is available
Is your energy bill worrying you? As heatwaves give way to storms and September reminds us that the cold weather is on its way again, many people are seeking help with soaring energy bills.
Ofgem, the energy regulator, has just announced a small increase in the price cap – the top limit an energy supplier can bill you for the energy you use.
But even small rises can have big consequences. So in this article, I’ll take a look at what’s going on, what help is available and what you can do if you can’t afford your bills.
A plain English guide to the energy price cap
The energy regulator, Ofgem, has just announced that the energy price cap is due to go up by 2%, which means the average family will pay around £1,755 each year. For people with prepayment meters, the cap is a little lower, at £1,707.
But what’s the Energy Price Cap? In simple terms, it’s the maximum price that energy providers can charge you for each unit of gas or electricity you use, if you live in England, Scotland or Wales. Northern Ireland has a similar price cap set by the Utility Regulator.
Of course, there’s no such thing as an ‘average’ bill, which is why the figure is a guide. The amount you pay will be affected by the energy tariff you are on, the meter you have, the size of your home, the number of people who live there, your specific energy needs and how energy efficient your home is.
Next up, what’s a unit of energy? Ofgem measures your energy use in ‘kilowatt hours’ (kWh). Each one of these is called an energy unit. Ofgem says that the average units used for a typical household each year is 2,700 units of electricity and 11,500 units of gas.
Every three months, Ofgem works out what the unit price will be and what the average bill will be. Even though the current price cap isn’t a massive increase, the cost of energy is still much higher than it was before the current ‘energy crisis’ when costs rocketed.
If you are thinking this all sounds complicated: it is! So use this guide just to understand a bit more about what your energy bill is telling you, from how much you are paying to whether your energy consumption seems too high.
What is the Winter Fuel Payment?
The Winter Fuel Payment is a lump sum payment that is paid automatically to help pensioners with their energy cost at the end of the year.
This payment has become hugely controversial since the government made the decision to cut the payment to over nine million pensioners. This decision has now been reversed, but it’s a salutary reminder that people feel very, very strongly about the cost of energy and its impact.
To qualify you need to have been born before 22 September 1959. You could get between £100 and £300 towards your heating bills for winter 2025 to 2026. You’ll get a letter in October or November to confirm this – but if you are worried you might miss out you can fill out an enquiry form.
It’s estimated that around 12.9 million pensioners receive the state pension. If you live in England, Northern Ireland and Wales you will get the payment automatically. However, if you have an income of over £35,000, then HMRC will take the money back. Want to give something back to society? You can opt out of the payment if you don’t think you need it.
If you live in Scotland , this payment is known as the Pension Age Winter Heating Payment. The scheme is ever so slightly more generous: You could get a payment of between £101.70 and £305.10. The eligibility criteria are more or less the same as England and Wales and the payment goes automatically to the same account your pension linked payments go.
You can find out more about the winter fuel allowance – along with other grants and payments for pensioners – on the Gov.uk website here: https://www.gov.uk/winter-fuel-payment
What about the Warm Home Discount scheme?
The Warm Home Discount Scheme is a £150 payment that is taken off your electricity (not gas) bill. This is debited from your bill by your energy supplier, if you meet the criteria.
Again, the discount should be paid automatically if you qualify. However, if you live in Scotland , you’ll have to apply for this scheme through your energy supplier. In Northern Ireland there is a different payment: The Affordable Warmth Scheme.
If you are on a prepayment meter, then you can still qualify for the Warm Home Discount Scheme. In this instance, your energy supplier will explain to you how the discount will be applied, for example, through a voucher.
You’ll qualify if you received one of six means-tested benefits, or potentially two other credits, you should qualify. But seek help from the office that pays your benefits if you are unsure.
What help is available for people who are struggling?
The Priority Services Register (PSR) is a free service that gives people additional support with utility bills – not just gas and electricity. Being on the register prioritises you for help and support and can result in the energy firm introducing new measures to help you afford your bills. It’s free to register – just contact your energy company.
Many people tell me that they think that the PSR is only for older people, but there are a wide range of people who may qualify. So don’t assume you won’t be entitled to sign up. The PSR can now also help with water suppliers too.
Even if you don’t meet the criteria for the register, you can ask your energy supplier for help if you are in financial difficulties. Before you contact the energy firm, you’ll need to put together a brief overview of your finances.
Write down the money you have coming in and what you pay out – and the amount of cash you are left over with. The energy firm is allowed to ask you for this so they can figure out the best solution to your situation.
Make sure you note down if you are worried about losing your job, or a source of money. Have a think about your home situation too. It can help to explain about the needs of your family, who the wage earners are and if anyone has specific needs or could be considered vulnerable or older.
If you aren’t sure how to get started, the free debt charity, StepChange has a budget planner and template on its website (and can help you get control of your finances if you are in debt too).
According to Ofgem’s regulations, the energy firm should come up with a tailored plan to meet your needs. Ofgem says the energy company should consider the following options:
- A review of your payments and debt repayments
- Payment breaks or reductions
- More time to pay
- Access to hardship funds
- Advice on how to use less energy
- The option to go on the Priority Services Register – a free support service for a wide range of people struggling or who need support
Most of the energy businesses offer energy or heating grants for their customers. As with help for people in financial difficulties, you’ll need to have the details of your budget and financial situation to apply. If you don’t have access to the internet, you can talk to organisations like Citizens Advice to get some help and advice.
If you feel that the business is not listening or helping – or they are making things worse – then you can take your complaint to the Energy Ombudsman for free. Make it clear to the business that you expect them to take no action against you while the matter is looked in to by the ombudsman.
- Martyn James is a leading consumer rights campaigner, TV and radio presenter and journalist