MILLIONS of energy customers are being charged more than other billpayers as energy bills are set to rise.
A typical household will spend £111 more a year on their gas and electricity bill after the new price cap comes in on April 1 – but some will pay another £119 on top.
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The cap is set by the regulator Ofgem every three months.
It limits the maximum amount energy firms can charge households for the units of gas and electricity they use.
But the cap is not uniform and households pay different standing charges and unit rates depending on where they live and how they pay their bills.
It means that millions of households will still end up paying £119 extra per year than those who pay via direct debit or through a prepayment meter.
Read more on energy bills
Around 13 million of the 22 million households on a standard variable tariff pay by direct debit.
Four million more pay for their energy through a prepayment meter, which now has the lowest price cap.
But figures obtained by The Sun from Ofgem show that five million households who pay for their energy via credit, debit card or cheque will pay an extra £119 more for their gas and electricity.
Ben Gallizzi, energy expert at Uswitch.com, said: “Many people like to pay their bills by cash or cheque to monitor their spending, and check the accuracy of their bill before they pay.
“But the disadvantages usually outweigh the benefits.
“Nearly all suppliers offer a discounted price for paying by Direct Debit as it ensures prompt, regular payments.”
Why your payment method affects your energy bill
For most households, the cheapest way to pay your energy bill is via direct debit.
From April 1 a typical household that pays their energy bill by direct debit will pay the following rates:
- 6.99p per kilowatt hour for gas
- 27.03p per kilowatt hour for electricity
- A standing charge of 32.67p per day for gas
- A standing charge of 53.80p per day for electricity
It means that a household with typical usage can expect to pay £1,849 a year – up from £1,690 a year.
How do I calculate my energy bill?
BELOW we reveal how you can calculate your own energy bill.
To calculate how much you pay for your energy bill, you must find out your unit rate for gas and electricity and the standing charge for each fuel type.
The unit rate will usually be shown on your bill in p/kWh.The standing charge is a daily charge that is paid 365 days of the year – irrespective of whether or not you use any gas or electricity.
You will then need to note down your own annual energy usage from a previous bill.
Once you have these details, you can work out your gas and electricity costs separately.
Multiply your usage in kWh by the unit rate cost in p/kWh for the corresponding fuel type – this will give you your usage costs.
You’ll then need to multiply each standing charge by 365 and add this figure to the totals for your usage – this will then give you your annual costs.
Divide this figure by 12, and you’ll be able to determine how much you should expect to pay each month from April 1.
This is based on a medium use household using 11,500 kilowatt hours of gas and 2,700 kilowatt hours of electricity.
But those who pay on receipt of a bill can expect to pay £1,968 over the same period.
This is because these households will have to pay the following unit rates and standing charges:
- 7.35p per kilowatt hour for gas
- 28.45p per kilowatt hour for electricity
- A standing charge of 37.57p per day for gas
- A standing charge of 59.60p per day for electricity
Households who pay for their energy with a prepayment meter will be charged the cheapest rate from April 1.
But be aware that households are at risk of being disconnected if they cannot afford to top up their meter.
Prepayment customers will pay the following rates from April 1:
- 6.78p per kilowatt hour for gas
- 26.20p per kilowatt hour of electricity
- A standing charge of 32.67p per day for gas
- A standing charge of 53.80 per day for electricity
It means that a household with typical usage can expect to pay £1,803 a year.
The exact unit rates and standing charges that you pay will also vary slightly based on your supplier and where you live.
To find out your specific rates check your first gas and electricity bill after April 1.
If you currently pay based on receipt of your bill and want to switch to paying by direct debit then reach out to your energy supplier.
You can set up a direct debit by logging into your online account.
What energy bill help is available?
There’s a number of different ways to get help paying your energy bills if you’re struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don’t think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have schemes available to customers struggling to cover their bills.
But eligibility criteria vary depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £2,000.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don’t need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill.
Some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you’re struggling.
Get in touch with your energy firm to see if you can apply.
