Households across the UK are in for a nasty shock when they receive their first gas and electricity bills of 2011.
A combination of price rises by five of the six major energy providers, and a succession of cold spells around the country mean heating costs have soared this winter.
E.ON became the latest firm to raise tariffs earlier this month, when it announced a 9 per cent increase in the cost of electricity and a 3 per cent hike in gas charges.
It followed four of its rivals in raising prices this winter, to reflect higher wholesale gas costs.
But the weather looks like it will have an even larger impact on our energy costs.
Analysis by Confused.com’s energy team suggests the typical family will have used an extra £59 of gas over the past three months – the equivalent of 65p a day – as freezing temperatures force heating systems to work overtime.
The average quarterly energy bill is just under £280* for those who pay by cash or cheque, although winter bills are inevitably higher and summer bills lower.
But this winter’s extra costs mean some families could face charges nearing £400 when their next bill comes through their letterbox.
Coping with high charges
So what should you do if you receive a payment demand you don’t think you can meet?
The first step is to contact your supplier, according to Lisa Greenfield, energy analyst at Confused.com.
She says: “If consumers receive a bill they can’t afford they should speak to their energy supplier straight away. Suppliers are obliged to consider your situation and reach an agreement that suits you both.”
This could involve spreading the payments out over a longer period of time. Remember, it is in the company’s interest to come up with a fair repayment plan that customers can actually meet. But if you fail to pay a bill, and simply try to ignore the issue, you risk eventually being cut off.
The energy suppliers code of practice states that a firm cannot cut off any customer who has agreed to – and who sticks to – a repayment plan.
But, Greenfield adds, “The cheapest way to pay for your gas and electricity is to pay by direct debit and opt for an online tariff. Your typical winter heating bill [for the six coldest months] would cost £288 on an online tariff, rather than £354 paying on receipt of your bill.”
Direct debit changes
If you pay your bills by monthly direct debit, this winter’s higher costs are likely to see the amounts rise, in some cases drastically.
If you think you are paying too much, contact your provider with new meter readings to make sure they are not overestimating your usage.
Greenfield says that direct debit customers have the same rights to ask for more manageable repayment levels if they can’t cope with the monthly amounts their supplier charges.
Should I switch now?
Now that five of the Big Six energy firms have announced price changes, it’s a good time to compare gas and electricity prices.
Only EDF, which has said it won’t raise prices before March, is likely to raise tariffs in the near future.
Confused.com’s utility comparison lets you compare deals from the major energy providers, as well as a number of other smaller suppliers.
Our customers save an average of £282 on their annual energy bills when they switch with us.
*Average tariff based on the Big Six’s standard cash/cheque prices assuming 16,500 kWh gas and 3,300 kWh electricity annually.
