ENERGY bills will rise every three months as part of a MASSIVE billing shake-up revealed today.
Ofgem currently reviews the energy price cap -which limits how much suppliers can charge customers – every six months.
But now it will be reviewed twice as often under a big rule change by the energy regulator.
It will be a bitter blow to household finances, as this will mean more frequent updates to the upper limit of what energy suppliers can charge customers on a variable dual-fuel rate.
Currently the price cap is reviewed twice a year, in April and October.
It currently stands at £1,971 and impacts 24million customers .
But now it will be reviewed FOUR times a year.
Ofgem admitted that customers “face a very challenging winter ahead”.
Its chief executive Jonathan Brearley said while the situation is “deeply worrying” for households, more frequent price cap reviews will make sure customers are “only paying the real cost of their energy”.
He added: “We will keep working closely with the Government, consumer groups and with energy companies on what further support can be provided to help with these higher prices.”
Ofgem said more frequent reviews would help reflect the most up to date and accurate wholesale prices.
It said that if prices were to fall from their current highs, then that would be passed on to customers more quickly, reducing their bills.
But it could also be bad news for customers – if prices rise further then these increases will be passed on more quickly.
If expert predictions are correct, it will mean bills will continue to rocket at a quicker rate under the price cap shake-up.
Experts from Cornwall Insight are predicting energy bills could rise to £3,358 on average from October when the price cap is expected to go up.
Ofgem is expected to announce what October’s price cap will be on August 26.
Now another review is set for January 2023, it estimated the price cap could jump to £3,616 – adding ANOTHER £258 onto your bill.
End Fuel Poverty Coalition co-ordinator Simon Francis slammed the price cap shake-up as “inhumane”.
He said: “Households will face a two-stage cost of living crisis this winter, thanks to Ofgem’s confirmation that energy bills will go up in October and again in January.
“Ultimately, this decision will force more people into fuel poverty in the middle of winter, causing additional stress on the NHS and it may ultimately lead to increased levels of excess winter deaths this year. It is simply inhumane.”
While Citizens Advice head energy policy Gillian Cooper said “many will be worried” as bills are set to rise more frequently.
She said: “Changing to a quarterly price cap should limit the risk of any more suppliers going bust, which is a good thing. But our bills are already incredibly high and still rising.
“The government was right to bring in financial support for people, but it may not be enough to keep many families afloat. It must be ready to act again before winter draws in.”
What can you do to avoid price hikes?
Unfortunately, there isn’t an awful lot you can do to escape rising energy prices.
With the cost of living sky-rocketing and inflation expected to hit 15% by the end of the year, we’ve all had our purse strings pulled tight, and everyone will be affected.
However, there are always schemes and funds available to hold your hand throughout the price hikes.
For example, there are plenty of energy grants and schemes open to help you out if you’re struggling, like the British Gas hardship fund which can lend you up to £1,500 free cash towards bills.
There’s also a one-off fuel voucher from your energy supplier if you’re on a prepayment metre.
Contact your supplier directly to see what they offer, what the eligibility requirements are, and how much you can get.
If you don’t know who your supplier is, you can find out here.
In terms of council funds, the Household Support Fund helps families with the rising cost of living, has been extended.
This help could include cash grants to pay bills or cover food costs – the help will depend on where you live.
For example, residents in Blackpool can get as much as £300, depending on their circumstances.
To find out what support is available in your area, contact your local council.