The energy price crisis is wreaking havoc with finances and household bills. And, at a time when furlough is ending, the universal credit uplift is being withdrawn and inflation increasing at its highest rate since records began, energy price increases could not be coming at a worse time for consumers. In this article, we'll look at what you can do to avoid surging energy bills and where to turn for help if you are struggling to pay your energy bills.
Normally, when it comes to avoiding high energy bills we would be telling you to compare the market and switch to the best price. However, the reality is that there are no low prices to be found. In fact, most energy firms have stopped paying comparison sites and therefore comparison sites are not allowing you to compare energy right now.
But, with energy prices averaged at 40% more today than they were a year ago, consumers are understandably desperate to find a cheaper alternative.
A potential way to avoid the highest energy prices is to go on a price cap rate. The price cap is the default rate that big providers are allowed to charge. Typically, it is based on prices over the past six months. This means that, although prices have been rising over the past six months pushing the price cap up by 12%, you could still get on a cheaper rate than current soaring energy prices. The downfall with this, however, is that on the 1st April 2022 the energy price cap will rise significantly if the current rise in prices continues. This means that, in the short term the energy price cap is a good option to avoid the current surging prices and therefore gives you some degree of financial stability for six months. However, in six months' time, you may be stung with high price rises and therefore need to switch again.
Whether you go on a price cap or stick on your current plan, there is no avoiding higher energy prices. Sadly, this will cause financial distress for many UK consumers. But, there is support out there.
First things first, if you find yourself struggling to pay your energy bills, contact your energy company. Although there are no guarantees, some companies will negotiate on late payment fees or put plans in place to help you pay.
The Government Warm Home Discount Scheme offers £140 off your electricity bill for winter 2021 to 2022. Although this rate has not gone up with inflation or with soaring energy prices, it can go some way to helping you pay your energy bills.
The government are also projected to intervene and bail out gas companies who are struggling in the current crisis. However, there are also calls for them to offer consumer support, especially with the planned withdrawal of the Universal Credit Uplift.
Gas and electricity bills are known as priority bills. Therefore, if you are struggling to pay these bills, there can be more serious consequences. If you are struggling to pay your utility bills or have fallen behind with payments, you should seek debt advice straight away.
Our online debt advice tool allows you to seek debt advice for FREE, with no obligation and without having to pick up the phone. If you are struggling with soaring energy prices, get started with our free online debt advice tool today.
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