Money Matters: What the latest price cap rise means for you

Energy prices are on the up again, with the price cap now confirmed to be rising by 6.4 per cent at the start of April.

What this means is that those of us on a price-capped tariff will be paying about £9.25 extra a month for our gas and electricity usage. This is on top of the January increase of about 1.2 per cent, or about £1.75 a month.

This is based on a typical household with average energy usage, paying by direct debit on a dual fuel tariff (meaning gas and electricity are paid for together).

What you’ll actually end up paying is always determined by your household’s energy use. Those who use other payment methods, including pre-pay meters, also pay differing amounts.

To get an accurate idea of how your monthly bills will change, you’ll need to look at how both the standing charges and unit prices are changing, for electricity and gas (assuming you have both), and compare this to your usage. This can seem complicated but there are online calculators that can help.

Most of us are on price-capped tariffs at the moment, as suppliers stopped offering fixed deals during the energy crisis.

Now deals are back on the table, I would advise everyone to look at what’s on offer – you’ll probably be able to find one that saves you money.

Rest assured your energy supply won’t be interrupted if you switch, and many suppliers offer cashback or refer-a-friend incentives which increase your overall saving.

Many people are also put off switching by the worry that they’d be stuck paying more if the price cap were to fall. But although we don’t know exactly what will happen to the price cap each quarter, we’re not expecting any dramatic drop.

Because of this, money saving expert Martin Lewis says if you can get a deal for 5 per cent more than the current (January to March 2025) price cap, you will probably save money over the course of the next year.

There are currently deals being offered by suppliers including Eon, British Gas, Outfox the Market and Ovo within this range – but they might disappear or see their prices increased now we know what the next price cap will be, so don’t put off looking.

Fixing will also give you certainty over what you’ll be paying, rather than waiting to see what the price cap does each quarter.

However there are also some deals which aren’t fixed but give a commitment to staying below the price cap, as well as ‘tracker’ tariffs which fluctuate with wholesale energy prices.

Moneysavingexpert.com is a good source of information on current deals, but comparison sites like GoCompare and Uswitch will be able to show you which deals would work best for your circumstances.

Worried about energy debt or rising costs? Speak to your energy supplier or a charity such as Marches Energy Agency, LEAP (Local Energy Advice Partners) and National Energy Action.

There may be grants or other support you could be eligible for – including the Warm Homes Discount Scheme which the government has just announced will be expanded to 2.7 million more households this winter.

Meanwhile we’re are awaiting the outcome of an Ofgem consultation on energy debt relief scheme, which could provide welcome help to households who have fallen behind on their bills. We’ll hopefully know more about this in the coming months.

Wrekin Housing Group customers who need help with their energy costs can contact our Money Matters team.