Martin Lewis' Money Saving Expert reveals exact date energy bills will go up after price cap shake-up
MILLIONS of households could see their energy bills rise or fall more regularly under plans by the regulator Ofgem.
The energy price cap is in place to stop customers being overcharged for gas and electric.
It's based on wholesale costs and is adjusted twice a year, affecting bills for anyone not on a fixed tariff.
The latest rise took place in April when the price cap increased 54%, pushing up the typical dual fuel bill to £1,971 a year, though the exact amount you pay depends on usage.
A further rise is set for October when experts predict that because of increasing wholesale costs, the price cap could increase to nearly £3,000 a year.
But the energy regulator has announced plans to make the change four times a year.
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Martin Lewis' Money Saving Expert has explained that there will be four dates through the year when the price of bills could change – if the plans go ahead.
In addition to April 1 and October 1, further changes could come into effect on 1 January and 1 July.
Ofgem says more frequent changes mean that bills would more accurately reflect the most up-to-date wholesale costs
If those costs fall the lower prices could be passed on to consumers more quickly, reducing bills.
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But the same goes for rises, which could come sooner.
Nothing has been confirmed yet, but discussions are due to take place about the proposed changes between now and mid-June.
There would be no change before the next scheduled adjustment to the price cap which is set to come in from October 1.
But if introduced, it could see bills rise in January 2023 and experts have warned this could pile more pressure on households at the coldest time of the year.
Peter Smith, director of policy and advocacy at National Energy Action, said: "The changes significantly reduce the current protection the price cap affords all consumers over winter and opens the door to significant price rises during the coldest months of the year.
"In the short term at least, the changes will be particularly damaging for the poorest households; removing the certainty of the price they will pay over winter.
"This could cause further immense financial strain and damaging health and well-being as prices soar every few months."
Under the new plans after October another change would be announced in November and come into effect from January 1 until March 31.
The next period when prices could change would be from April 1 – June 31, then July 1 – September 31, and then October 1 to December 31.
Currently the twice a year price cap change means there are two periods running from April 1 to September 31, and from October 1 to March 31.
Martin Lewis also criticised Ofgem over separate proposals that could lead to fewer deals lower than the price cap when energy price fall.
The money saving expert yesterday blasted the regulator as a "f***ing disgrace that sells consumers down the river" but apologised for the outburst.
Martin's criticised the market stabilisation charge (MSC) which means that suppliers which attract new customers must pay compensation to the company they switch away from if wholesale prices fall.
It's designed to help protect energy firms from wild swings in the energy market.
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But Martin has said the mechanism will effectively discourage energy firms from launching any deals that are cheaper than the price cap.
He said: "It's a disaster that means if wholesale prices fall and a new firm gets a switcher, it must pay 85% of difference to old firm. Killing hopes of firms launching cheaper deals."
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