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Energy bills could go up before October price cap rise | Energy bills could go up before October price cap rise |
(32 minutes later) | |
Energy bills could increase ahead of the expected rise in October, the UK's energy regulator has revealed. | Energy bills could increase ahead of the expected rise in October, the UK's energy regulator has revealed. |
Ofgem and industry body Energy UK said it was "possible" for suppliers to raise customers' direct debits before the new cap on energy prices kicks in. | Ofgem and industry body Energy UK said it was "possible" for suppliers to raise customers' direct debits before the new cap on energy prices kicks in. |
Any rises would be to help spread the cost of higher energy use in the winter months, Ofgem said. | |
Households have been warned of sharp rises in energy prices, with average bills forecast to reach £4,200 in 2023. | |
Ofgem said direct debits are usually charged in a way so that customers build up "credit" during the warmer summer months when usage is lower, to spread out the cost of using more energy in the colder months. | Ofgem said direct debits are usually charged in a way so that customers build up "credit" during the warmer summer months when usage is lower, to spread out the cost of using more energy in the colder months. |
"It's therefore possible for direct debits to increase ahead of a price cap rise or even when a customer's use has remained constant," an Ofgem spokesperson said. | "It's therefore possible for direct debits to increase ahead of a price cap rise or even when a customer's use has remained constant," an Ofgem spokesperson said. |
However, Ofgem said customers can ask for their excess credit to be "returned at any time and can contact their suppliers to change how their direct debit is spread." | However, Ofgem said customers can ask for their excess credit to be "returned at any time and can contact their suppliers to change how their direct debit is spread." |
"For example, they pay for exactly what they used in that month and do not build up a credit ahead of winter," Ofgem said. | "For example, they pay for exactly what they used in that month and do not build up a credit ahead of winter," Ofgem said. |
Energy crisis is on scale of pandemic - Martin Lewis | |
Energy bills forecast to hit over £4,200 a year | |
Energy UK, the trade body for the energy industry, said direct debits were "reviewed periodically" with suppliers taking into account factors including estimated usage, current tariffs, debit/credit balances and recent meter reads. | |
"It is, therefore, possible some customers' direct debts will change in advance of October," a statement said. | |
"All suppliers must, however, ensure that direct debits are set correctly based on all relevant information available at the time of review, and that they communicate any changes in a way that helps consumers understand their payments for energy." | |
A new price cap- determining the maximum suppliers can charge customers for energy usage in England, Scotland and Wales - is due to be announced at the end of this month, but will come into effect in October. | A new price cap- determining the maximum suppliers can charge customers for energy usage in England, Scotland and Wales - is due to be announced at the end of this month, but will come into effect in October. |
Consultants Cornwall Insights expects this to rise to £3,582 a year, due to the ongoing war in Ukraine pushing up global wholesale gas prices, and have warned of further rises over the winter. | Consultants Cornwall Insights expects this to rise to £3,582 a year, due to the ongoing war in Ukraine pushing up global wholesale gas prices, and have warned of further rises over the winter. |
Ofgem said protecting consumers was its "top priority", adding "suppliers must ensure that direct debit payments are based on the best and most current information available to them". | Ofgem said protecting consumers was its "top priority", adding "suppliers must ensure that direct debit payments are based on the best and most current information available to them". |