Energy customers are ready for a rollercoaster of bills – how do you experience it?

MILLIONS of households are in for a rollercoaster on their energy bills this year.

We’ll explain what’s going on, whether you should consider a repair and how to fix it.

WHAT IS GOING ON?

In recent years, energy bills have skyrocketed due to the corona lockdowns, the cold winter and geopolitical issues such as the Russian invasion of Ukraine in early 2022.

The energy price cap limits the price you pay for energy, although your bill will vary depending on the amount of energy you use.

But households will experience some relief this summer when bills fall to their lowest level in two years, as the price cap set by Ofgem falls on July 1.

The typical cost for 29 million households on their energy supplier’s standard variable tariff will fall from £1,690 per year to £1,568 per year.

However, this cost reduction will be short-lived, according to experts.

This is because Ofgem reviews the price cap every three months.

And the latest forecasts from energy consultants Cornwall Insight suggest average bills will rise again to £1,761 in October.

Ben Gallizzi, energy expert at Uswitch.com, said: “Utility bills will fall in July as the price cap falls by 7%, providing some relief for households on a standard variable tariff.

“Don’t be lulled into a false sense of security, however, as energy analysts suggest interest rates will rise by 12% in October and remain so throughout the winter, bringing the average annual household bill to £200 to £1,761 to rise.”

What can households do to keep costs under control? We look at the options.

DO YOU NEED TO REPAIR?

This is the question readers ask us, but the answer is not simple.

There are two types of energy deals offered to customers: the standard rate and the fixed rate.

The standard rate is limited by the price ceiling.

But several major suppliers, including British Gas, Octopus and Ovo Energy, are now offering cheap fixed deals below the current price cap.

Repair is good if you want security, but it’s a gamble because if prices eventually drop, you could be stuck paying more.

Many have hefty exit fees worth up to £190 that you have to pay to leave them.

Customers should also consider price ceiling forecasts when making their decision.

Ben Gallizzi of uSwitch.com added: “It’s impossible to know what energy rates will be in six, nine or 12 months’ time, but while prices continue to fluctuate, the best choice for households wanting to avoid payment uncertainty is to take out the energy rates. in a permanent deal that gives you at least a year of stability.”

James Longley, managing director at Utility Bidder, said: “With Ofgem’s energy price cap falling in July, UK customers will be wondering whether now is the right time to switch to a fixed energy contract.

“They give customers peace of mind and offer a lot of choice in terms of start and end dates.

“It is recommended that you look at and compare comparison sites to find the best deals for your energy repairs, and this should only be considered if you lock in the cheapest rate.”

Kara Gammell, personal finance expert at MoneySuperMarket, added: “With speculation that the price cap could rise in October, switching to a fixed rate now can provide some reassurance if you prefer to know how much your energy will be in the coming will take twelve months.”

WHAT ARE THE BEST FIXED DEALS?

There are a handful of solid deals that beat the October price cap.

For example, Ecotricity is currently offering its Green 1 Year Fixed tariff, which costs an average household £1,540 per year – £150 less than Ofgem’s price cap.

That’s 2% less than the July price cap (£1,568), but 12.5% ​​cheaper than the forecast October cap.

This involves an exit fee of £75 per fuel, so £150 if you use a duel fuel rate.

While Outfox the Market’s Fix’d Dual Jun24 v1.0 tariff will cost an average household £1,576 per year – 0.5% more than the July price cap, but 10.5% the predicted October cap.

Octopus Energy’s 12M fixed rate costs £1,611 per year, but there are no exit fees if you leave early.

For the average household, this will cost 2.5% more than the July price cap, but 8.5% less than the October cap.

Before you switch, compare prices as they vary depending on where you live, and take exit fees into account.

However, customers should also be aware of other changes in the energy market that could affect prices.

ENERGY MOVEMENTS THAT YOU SHOULD CONSIDER

Like any good roller coaster, there are some unexpected twists to consider before making the switch.

Regulator Ofgem has unveiled plans to end the ban on acquisition-only rates later this year.

This would mean that energy companies could offer cheap prices to new customers, but loyal customers would not have access.

The ban was an issue that The Sun fought against as it turned away loyal customers.

But now experts think removing it could boost fixed interest rates and bring competition back to the energy market.

However, one energy company, Octopus Energy, has told The Sun that it will not offer cheaper rates even if the ban is lifted.

The Sun will be closely monitoring how this affects prices and customers.

It would be good for competition, but it does mean that the most vulnerable could lose out.

Ofgem is also considering changing the way the price cap works in the future.

This could include, for example, a ‘dynamic’ price ceiling, which means that energy companies can charge more during peak hours and less at night.

But these changes have not yet been agreed upon, and there is no timeline yet for when they will happen.

HOW WILL THE ELECTIONS AFFECT THE BILLS?

The outcome of the elections could also have an effect on legislative proposals.

Labor wants to set up a state-owned energy company called Great British Energy, which it says will cut household bills by £93 billion.

The details remain patchy and the party has not really explained how this would lead to lower household bills.

The Conservative Party has not yet set out its ambitions to shake up the industry.

What about the flexible rates

Customers who do not want a repair can rely on a standard rate to follow the price cap.

Kara Gammell, personal finance expert at comparison site Money Supermarket Group, says: “These will almost always be at or below the price limit.”

For example, E.ON Next’s variable rate Pledge offers a fixed discount of approximately three percent on the price cap rates for twelve months.

It will save the average household around £50 a year, but will incur a £50 exit fee if you switch before the end of the year.

The deal is available to both new and existing customers.

For greater reward but higher risk, Octopus Energy offers two variable rates that follow wholesale gas and electricity costs.

Customers on the Octopus Tracker see their prices change daily, but unit prices have remained consistently below the price ceiling in recent months.

For example, over the past 30 days, people living in southern England on the Octopus Tracker paid a maximum of 20.3 cents per kWh for electricity and 4.81 cents per kWh for gas, which is 4.2 cents and 1.23 cents cheaper than the price cap per fuel .

The Agile Octopus tariff works in the same way as the Octopus Tracker, the main difference being that the former’s prices change every half hour.

But anyone who wants to switch to one of these tracker tariffs must have a smart meter.