Millions of UK households have been warned that energy bills are set to rise by £202 in July, when Ofgem announces the new price cap. The potential increase is partly attributed to the ongoing conflict in Iran and broader Middle East tensions, which are impacting global energy costs.
Expected Rise in Energy Costs
Typical annual bills are expected to climb from £1,641 to £1,843. In April, energy bills fell by 7%, lowering the annual price cap by £117 to £1,641, but the upcoming rise would negate that reduction.
Ofgem is expected to announce the next price cap at the end of May. However, new research indicates that few households are aware of the impending increase. Two-thirds of the 12 million homes on standard tariffs do not realize their energy rates are likely to rise by 12% in July, according to a survey by price comparison firm Uswitch.
Impact on Households
Of those on standard tariffs, 66% told Uswitch they are unaware of the impending price rise, and the same percentage said a 10% price hike would negatively affect their household budget. One in ten homes on standard tariffs said they would need to use savings to pay their energy bills, while a sixth would cut back on essential spending, such as food and transport.
Energy expert Ben Gallizzi urged Brits unsure about the upcoming price increase to lock in a cheaper fixed tariff, which could save a typical home £233 when the July cap is enforced. He said: "More than 10 million households on standard tariffs are sleepwalking towards energy bill hikes, with their prices predicted to increase 12% in July. More worryingly, almost half of those on standard tariffs mistakenly believe that they're on the best deal, despite the fact that the average home could save hundreds of pounds with a fixed deal."
Gallizzi added: "Two-thirds of households even say a 10% increase in their energy bills would hit their finances, so now's the time to act to protect yourself from higher costs. Take a moment to check online to see what deals are available to you. The cheapest fixed deals available at the moment are 13% less than the predicted July price cap, so we urge households to lock in lower rates while they're available."
