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The energy price cap has fallen – why are my bills rising?

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The energy price cap has fallen – why are my bills rising? 

Energy prices have been at the forefront of most people’s minds for the last year or so, with bills soaring and the cost of living reaching a 40-year high. So, it definitely brings some relief to learn the energy price cap has lowered. 

Yesterday, energy regulator Ofgem announced the price cap was being lowered by £999 from April, with many hoping these lowering costs would be the light at the end of the tunnel after the turbulence of previous months. 

The current energy price cap stands at £4,379 per year, and will reduce to £3,280 for the average household from April 1st. This is a 23% reduction, music to the nation’s ears. This reflects the fall in recent wholesale prices. 

if the energy price cap is going down – why are our bills going up? 

Well, the current Energy Price Guarantee (EPG) set out by the government, has kept the cap for households at £2,100 annually. On top of this, the end of the £400 energy support payment, paid in six instalments of £66 and £67, will end come April. 

So, with this government support ending at once, households will be required to pay an average of £500 more a year as the result of this support reducing, despite the price cap lowering. This means customers will be paying around 20% more on their bills as the government’s EPG becomes less generous. 

Danni Hewson, AJ Bell head of financial analysis, comments:

“The irony won’t be lost on many that at a time energy prices are finally falling from their uncomfortable peak millions of households across the UK will find themselves paying more. People are still protected to a degree by the government’s energy guarantee, but from April it will be much less generous.  

“To add insult to injury the welcome discount that’s been popping into people’s accounts every month also ends at the same time and taken together there will be plenty of families hoping for a very mild spring.” 

What if I can’t pay my energy bills?

If you are currently experiencing financial difficulty and cannot pay your bills or think you will be unable to pay them when the EPG ends, it is important to reach out for help as soon as possible. 

Firstly, it is important to be direct and transparent with your energy provider. They will be able to provide help and guidance and it is the best place to start. Charities such as StepChange and Turn2Us help people across the UK, giving free, impartial advice, as well as direct help. 

Citizen’s Advice is also a brilliant tool which gives guidance and advice on many topics, from energy bills to council tax. Check it out here. 

The post The energy price cap has fallen – why are my bills rising? appeared first on MoneyMagpie.

Original source: https://www.moneymagpie.com/make-money/the-energy-price-cap-has-fallen-why-are-my-bills-rising

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