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Low income families and pensioners to be hit hardest by 1 April price rises

Low income families and pensioners to be hit hardest by 1 April price rises

Energy bills are set to increase by a combined £1.67 billion on 1 April, as price rises from 36 energy suppliers come into effect.

Beat the energy price rises

All of the big six suppliers have raised their prices following the Ofgem price cap increase. Don’t get caught out - switch to a fixed deal today!

All of the big six and many smaller suppliers announced price rises to meet the increased price cap level, which comes into effect on 1 April.

It is set to be the largest price increase in a single day since 2011.

Price cap no protection against bill hikes

Over 11 million households on standard credit meter tariffs face an average annual bill increase of £117, with a further 3.6 million on prepayment meters hit with an average price rise of £106 per year.

The price rises coincide with Ofgem’s energy price cap increase, which also comes into effect on 1 April.

The default tariff cap came into effect on 1 January 2019 and is a limit on the rate suppliers can charge for their standard variable tariffs.

On 7 February it was announced that the cap will increase to £1,254 on 1 April, which set off a wave of price rises from energy suppliers to match the higher cap.

Ofgem has committed to reviewing the level of the energy price cap twice a year, each April and October.

Rik Smith, energy expert at uSwitch, says: “This may seem like a cruel April fools joke, but it’s no laughing matter. The stark reality is that the very cap that was supposed to protect customers on poor-value standard tariffs is now responsible for some of the harshest price increases in recent memory. Consumers have just days left before their energy bills will skyrocket.”

Worst-affected households and regions

While the average price rise is £117, uSwitch analysis has found it will be those who can least afford it who are hardest hit by these bill increases, with the impact felt more harshly depending on average income and region.

Households receiving benefits will be worst affected, as a larger proportion of their income will be swallowed up paying their gas and electricity bills. The average £114 price rise for single people and young families on benefits means these households will spend 6.5% of their average £19,000 income on their energy bills. In Southern Wales, this increases to a staggering 8.4% of the average budget for these households.

Due to higher usage, large families in socially rented houses will pay an extra £127 a year up to the new cap — 5.7% of their average £24,000 income. This is even more pronounced in Northern Scotland, where increased energy bills will eat up 7.3% of these families’ incomes.

On average, pensioners on standard variable tariffs across the country will spend 4.1% of their retirement income on their energy bills once they increase on 1 April. Once again, this will be felt more by pensioners in Northern Scotland, with bills taking up 4.9% of their household income.

And despite seeing a larger annual price rise of £203, prosperous suburban families in London will spend just 2.2% of their annual income — an average of £87,000 — on their energy bills if their supplier prices their tariff up to the cap level.

There's still time to beat the price rises

The cheapest dual-fuel energy deal on the market today is priced at an average of £892, £362 lower than the new price cap level that many suppliers are set to charge from 1 April.

Rik Smith from uSwitch said: "It is vital that households are not lulled into a false sense of security by the idea of a price cap. You can switch to a much cheaper rate in minutes and save over £300 compared to stating on a standard plan that's priced right up to the level of the cap."

Beat the energy price rises

All of the big six suppliers have raised their prices following the Ofgem price cap increase. Don’t get caught out - switch to a fixed deal today!

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