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Millions of UK households are at risk of overpaying on their energy bills in the New Year if they miss an important deadline, research from Uswitch has revealed.
The comparison service has urged bill payers to submit their smart meter reading in the next week to avoid an unwelcome bill spike in the New Year when the new price cap comes into force.
Research shows that as many as nine million households could be affected, losing out on a combined £66 million.
Households on a single variable tariff (SVT) that don’t have a smart meter can submit their meter readings before New Years’ Day to avoid the higher price cap.
The average household on an SVT with typical usage will spend around £135 on energy in December, compared with £165 in January, analysis shows.
Missing the window to submit a meter reading before the price cap increase could put a household at risk of having some of their usage estimated, and possibly charged under the higher rates.
Elise Melville, energy expert at Uswitch.com, said: “Submitting a meter reading may not be top of households’ to-do list this Christmas, but it’s worth doing to avoid the risk of paying more for their energy in the New Year.
“Customers who don’t have a smart meter should aim to submit their readings before or on Wednesday 1 January, so their supplier has an updated – and accurate – view of their account.
“If you leave it any later than this, then some of your December energy usage could end up being estimated and therefore charged under the higher January rates.
Ofgem raised the energy price cap rose in October to £1,717, with the figure set to rise £21 in January to £1,738. Experts at the trusted Cornwall Insight will rise again in April to £1,762.
The energy price cap is the maximum amount energy suppliers can charge you for each unit of energy if you’re on a standard variable tariff. That includes most households. It is expressed as an annual bill for an average home.
The change in prices is reflective of the cost of wholesale energy – the amount energy firms pay for their electricity and gas before supplying it to households.
To beat upcoming price risies, some money experts recommend switching to a fixed energy tariff deal which will keep household energy costs consistent for at least 12 months.
Uswitch’s Ms Melville advises: “Now is also an ideal time to look at switching to a new energy tariff, as there are a range of fixed deals currently available that are cheaper than the January price cap.
“By opting for a fixed deal, you’re locking in those rates for the duration – which means households could have price certainty and avoid the ups and downs of the price cap. Make sure you are happy with how long the contract lasts and any exit fees for leaving early.
“You can check your options by running a comparison at Uswitch.com, where you’ll be able to see available tariffs with personalised costs based on your household consumption.”
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