There are fresh headaches over bills heading our way
The rise stems from the energy price cap(Image: Giuseppe Lombardo via Getty Images)
Nearly 12 million households have been sent a warning in the UK. Energy experts say they are sleepwalking into a fresh energy bill shock this summer – with many completely unaware their costs are set to surge.
Research by Uswitch has found that 63% of homes on standard tariffs don’t realise prices are expected to increase from 1 July, while 17% wrongly think bills will actually decrease. The rise is being fuelled by the energy price cap, regulated by Ofgem.
The cap is predicted to jump 12% – equivalent to £202 annually. This would see the typical yearly bill climb from £1,641 to £1,843, heaping additional strain on already tight household budgets.
Families bracing for financial squeeze
The consequences could be serious. Approximately 66% of households say even a 10% increase would damage their finances.
• 10% would be forced to dip into savings
• 17% would cut back on essentials such as food or transport
Younger households face particular vulnerability, with 18% saying they’d need additional income and 11% fearing they’ll fall into debt
Despite the approaching financial crunch, widespread confusion persists. Over a quarter (26%) of households on standard tariffs are unaware of what’s happening to the price cap in July, while 19% mistakenly believe costs will fall.
Misplaced confidence proving costly
Half of those on standard tariffs – 51% – wrongly believe they’re already on the best deal available, despite cheaper alternatives being on offer. This false sense of security means 47% aren’t planning to switch providers, with just 13% intending to move to a fixed tariff. Yet fixed deals could save a typical household £233 compared with the expected July price cap, according to the analysis.
There are currently five fixed tariffs cheaper than standard rates, with around 30 deals available lasting between 10 months and two years.
The ‘no good deals’ myth that’s holding people back
A considerable number of households are failing to take action due to common misconceptions:
• 25% say they are happy with their current tariff
• 21% wrongly believe there are no good deals available
• 16% think all tariffs are the same
• 15% believe switching is too complicated
The reality is that switching can take just minutes.
Ben Gallizzi, energy expert at Uswitch, said: “Nearly 12 million households on standard tariffs are sleepwalking towards energy bill hikes, with their prices predicted to increase 12% in July.
“More worryingly, almost half of those on standard tariffs mistakenly believe that they’re on the best deal, despite the fact that the average home could save hundreds of pounds with a fixed deal.
“Two-thirds of households say even a 10% increase in their energy bills would hit their finances, so now’s the time to act to protect yourself from higher costs.
“Take a moment to check online to see what deals are available to you. The cheapest fixed deals available at the moment are 13% less than the predicted July price cap, so we urge households to lock in lower rates while they’re available.”
Winter warning
The financial strain may not ease when summer arrives. Predictions indicate that elevated energy prices could continue into autumn and winter – when consumption typically increases – raising the possibility of even heftier bills as the year progresses.
For the time being, households are being strongly advised to act swiftly – or risk being blindsided when the increased cap kicks in come July.
