Households underestimate energy price cap increase by over £1,000
Consumers believe the price cap will increase by £487 – a £1,124 underestimation based on current predictions[1]
October’s price cap is expected to increase to £3,582[2] – a £1,611 hike on the current £1,971 figure
A quarter of households – seven million – don't know what's going to happen to their energy bills in October, and three million believe they will decrease[1]
Only two million consumers correctly predicted that bills will increase by more than £1,500[1]
Uswitch is urging households who can’t keep up with energy bills to contact their suppliers and request a more affordable payment plan.
Households believe the October energy price cap will increase by £487 when it is announced on August 26 – a severe underestimation based on current predictions[1], according to new research from Uswitch.com, the comparison and switching service.
Experts expect the current £1,971 price cap to increase by £1,611 to hit £3,582 in October[2]. This means that consumers are underestimating the hike by £1,124[1]
More than a quarter of households (27%) – more than seven million bill-payers – don’t know what is going to happen to the price cap. And an optimistic one in ten (12%) believe that the price cap will decrease[1].
Only two million households (8%) were on the same page as the experts by predicting that the price cap would rise by more than £1,500[1].
The £400 energy bill support for all households — announced in May — was calculated on the basis of Ofgem’s prediction that the price cap was likely to rise to £2,800. If the price cap hits £3,582 in October there will be a potential additional £700 shortfall for households to find.
Uswitch is calling for the universal £400 support to be increased to at least £600, with the payments spread across the six coldest months of the year. Payments to vulnerable households should also rise from £650 to £950, with the extra £300 being paid in January when energy use is highest. If current volatility results in an even higher price cap, support should increase proportionately.
Richard Neudegg, director of regulation at Uswitch.com, said: “With the summer holidays in full swing, it’s not surprising that so many people haven’t been on top of the news about changes in the price cap.
“The promised £66-a-month over winter, while a good start, will barely touch the sides of the predicted increase.
“The energy bill support needs to be urgently reviewed. The new predictions will leave a lot of people worried about how they are going to afford their bills this winter and beyond, based on the sky-high predictions through to next October. Households desperately need to know that sufficient financial support will be provided.
If you are worried about your bill payments, or your energy account is going into debt, speak to your provider as soon as possible. They should be able to help you find a way forward, such as working out a more affordable payment plan. You may also find you are eligible for additional support such as hardship funds and other energy help schemes.”
Find out if you’re eligible for an energy help scheme, grant or benefit here
FOR MORE INFORMATION
Prisca Simango
Phone: 07971 093 512
Email: prisca.simango@rvu.co.uk
Twitter: @UswitchPR
Notes
Research conducted online by Opinium, 19th to 22nd July 2022, among 2,000 UK adults, weighted to be politically and nationally representative.
1. Respondents were asked ‘Ofgem are due to review the energy price cap again in August, to implement in October. What do you think will happen to the price of your Standard Variable Tariff in October after the review?’ 27% said ‘Don’t know’. 27% of 28.1 million UK households = 7.6 million. 12% said ‘Will decrease’. 12% of 28.1 million = 3.4 million. The average figure for how much it would increase or decrease by was £487.20. 8% of respondents said ‘It will increase by more than £1,500 a year’. 8% of 28.1 million = 2.2 million.
2. Cornwall Insight: Price cap forecasts for January rise to over £4,200 as wholesale prices surge again and Ofgem revises cap methodology
About Uswitch
Uswitch is one of the UK’s top comparison websites for home services switching, including energy, broadband and mobiles.
More people go to Uswitch to switch their energy, broadband and mobile than any other site, and we have saved consumers over £2.7 billion off their bills since we launched in September 2000.
Free mobile app Utrack also helps households manage their home energy usage and make potential savings.
Uswitch is part of RVU, a group of online brands with a mission to empower consumers to make more confident home services, insurance and financial decisions.