On October 1st, Ofgem lowered the price cap for households in England, Wales, and Scotland to £1,834 annually for a standard dual-fuel energy bill, down from £2,074.
A significant part of this reduction arises from Ofgem's new method of calculating the average household's annual gas and electricity consumption. Under the previous approach, the cap would have only dropped by 7%, resulting in an annual cost of £1,923. However, for those using prepay meters or opting for cash or cheque payments, the figures are slightly higher at £1,949 and £2,052, respectively.
The new cap of £1,834 per year, effective from October to December, is based on Ofgem's revised calculations, assuming households are now using 7% less electricity and 4% less gas due to the prevailing cost of living challenges. While last month the regulator initially announced a headline figure of £1,923 per year for comparison, going forward, only the new system will be used.
A significant part of this reduction arises from Ofgem's new method of calculating the average household's annual gas and electricity consumption. Under the previous approach, the cap would have only dropped by 7%, resulting in an annual cost of £1,923. However, for those using prepay meters or opting for cash or cheque payments, the figures are slightly higher at £1,949 and £2,052, respectively.
The new cap of £1,834 per year, effective from October to December, is based on Ofgem's revised calculations, assuming households are now using 7% less electricity and 4% less gas due to the prevailing cost of living challenges. While last month the regulator initially announced a headline figure of £1,923 per year for comparison, going forward, only the new system will be used.
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NewsTranscript
00:00 It's really important, I think, particularly during the current cost of living crisis and
00:06 when energy prices are so high, that people do try to understand their usage and what
00:11 makes up their bill. If you have a smart meter that will help you to understand your usage,
00:16 you'll get visibility on how much you're spending and also things like what the standing charge
00:20 is versus your consumption as well.
00:23 From the 1st of October, Ofgem lowered the price cap for households in England, Wales
00:28 and Scotland to £1,834 annually for a standard dual fuel energy bill. That's down from £2,074.
00:38 Ofgem's new method of calculating the average household's annual gas and electricity consumption
00:44 is a significant part of the reason for the reduction in price. Under the previous approach,
00:49 the cap would have only dropped by 7%, resulting in an annual cost of £1,923.
00:56 There are a lot of small micro changes that people can do, which together actually do
01:02 make a really significant difference. I think your smart meter in-home display can be really
01:06 helpful in helping you to see which appliances in your home, for example, are quite energy
01:11 hungry. In my home, it's my electric oven, which I know I'm careful about how I use it
01:17 and when I use it because it guzzles the electricity. But there are going to be other appliances,
01:21 things like your tumble dryer, your washing machine, for example, which will tend to use
01:28 more energy. So it's just thinking about how you're using them.
01:31 The other thing I would say is looking at the kind of energy efficiency of your home.
01:35 Unfortunately, in this country, we have quite a lot of leaky homes. We have quite a lot
01:38 of old fashioned housing stock, which can leak energy basically. So if you haven't done
01:44 so already, I would really recommend looking at things like insulating your doors and windows
01:49 if you don't already have double glazing, for example. You can do that quite easily
01:53 with simple kind of strips that you can get from your DIY shop.
01:56 Victoria is a director at Smart Energy GB, a not-for-profit campaign designed to promote
02:02 the importance of smart meters and their benefits to people and the environment.
02:07 Smart meters basically give you the visibility so you can see what you're using. The other
02:11 area I think they're really useful is if you're on a prepayment plan. If you have a prepayment
02:15 smart meter, they can be tremendously helpful because they allow you to top up online so
02:21 you don't have to visit a shop, for example, to top up. That again, if you're away, for
02:27 example, it means if you're away for a week or a weekend, seeing friends or family, for
02:30 example, you know that you're not going to run out because you can top up online.
02:34 So there's some really useful benefits, I think, for people on smart prepay, as well
02:39 as if you're not on smart prepay, visibility that your display unit gives you in terms
02:44 of your usage. The other really helpful thing, I think, is knowing that you're going to get
02:48 accurate bills. And I think what we've seen is that people are very concerned, quite understandably,
02:53 over the winter just to make sure that they're only being billed for what they're using.
02:58 And your smart meter, because it gives that real-time information, ensures that you get
03:02 accurate bills as well.
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