Ofgem has announced a new price cap of £3,549 per annum
for the average house, effective from the 1st of October 2022.
Now that's for an average house.
Lots of people, myself included, don't live in the average house.
What everybody wants to know is what is their own particular direct debit
going to be from the 1st of October and even for the further price changes
that are expected in 2023.
The other complication is
that energy companies can set their own kilowatt hour rate
and also their standing charge rate for themselves
so long as they don't exceed the price cap for the average house.
And then within the regions that the energy company covers,
they can set different rates for each region.
So it is really difficult to try and work out what your kilowatt
hour rate and standing charge are going to be.
And it's probably impossible to be honest until you get your first bill.
I have come up with a method of estimating what you will have
to pay from October 2022.
The price cap was introduced in January 2019
and I have applied the percentage change in the price cap for each of the price
cap periods to the monthly direct debit.
It seems logical to me that if the price cap increases by 10%,
then most customers direct debits will increase by around 10%.
The table has 4 columns for 4 different sizes of properties - a small property,
probably a flat, two medium sized properties and a large property.
The table
starts in 2019 with payments of £70, £90,
£110 and £150 per month,
which I think are reasonable estimates for the monthly direct debits
for each of these different sizes of properties back in 2019.
The percentage change of the price cap
is then applied to the monthly payment to give the monthly direct debit
for each of the four different property sizes in each of the price cap periods.
So we now have the changing monthly direct debits for properties
paying the price cap from January 2019 through to December 2023.
So suppose that your current monthly direct debits
in September 2022 is £200.
Find the closest figure in the April 22 to September
2022 row, which is £191.
Look down the column and you will see that in the purple
row for October 2022 to December 2022,
your payments will be around £343 per month,
since £200 is actually a bit over the £191 in the table.
Your payments will be more than £343,
so around £350 to £360 per month.
Look further down the column and you will see that in April 2023,
your payments forecast to increase to £640 per month.
So since £200 is just over £191 per month,
your payments will be just over £640.
So £650, £660 per month.
The cumulative percentage change column shows the percentage increase
since the price cap was introduced in January 2019.
This shows that in October we will be paying 212% more
for gas and electricity than we were paying in January 2019.
This is bad.
But what is shocking is that in April 23,
if the forecast by Cornwall Insights is correct,
we will be paying 482% more for gas and electricity
than we paid in January 2019.
I've looked at my personal situation.
I live in a flat.
And back in 2020, I moved to Symbio,
who were an incredibly cheap supplier,
and during the summer I only paid £20 per month.
Symbio, increased the direct debit over the winter months to £35 per month.
Once wholesale prices increased, it was actually no surprise
that Symbio went bust.
I was then moved to EON Next.
In April 2022, when it was starting to become obvious
that the price cap was going to go up and up over the coming months,
EON Next offered their customers a tariff that would freeze the April
2022 price cap until April 2023.
I signed up to this tariff very quickly.
Martin Lewis recommended the tariff a few days later,
and I believe that there was a sudden rush of people signing up to the tariff
and EON Next then withdrew the tariff.
I was very lucky to get this tariff.
I don't understand
why EON Next offered this tariff because it is loss making for them.
But I've got it so I don't really care.
So I will continue to pay £83
per month until April 2023.
However, if you have a look at the table,
I'm going to have a massive 236% increase, which means that I will need to find
an extra £200 more per month to pay for my electricity in April 2023.
Hopefully you can use this table to give yourself a rough idea
of how much your direct debit will increase from October 2022.
And if Cornwall Insights forecast are correct,
an idea of roughly how much you will be paying in April 2023.