Energy bill hikes explained – and how you can survive them

ENERGY price hikes kicked in yesterday as some customers saw bills leap by 50 per cent as the price cap increased.

Tens of millions of others face paying a third more for power within six months. And ALL households are set to pay an extra £100-plus Ofgem levy on top of their bill price next year.

The controversial charge will cover big companies’ costs when they take over customers of firms that go bust — and will apply even to households who were not supplied by collapsed providers.

Sun Money last week answered the key questions for customers of firms that go under — but many people with providers staying afloat are also being walloped by rocketing prices.


Millions on bargain £800 or £900 average-price, 12-month discount tariffs, which expire around now, are seeing bills rise by up to 50 per cent. They are being forced on to variable tariffs at the new price cap of £1,277, after yesterday’s £139 rise.

There are no cheaper fixed-price deals available as crisis-hit suppliers have hiked tariff prices while battling record wholesale gas prices. The cheapest is £1,577 with Scottish Power, said.

Ten firms have gone under in seven weeks with two million customers affected.

The vast majority of us are still supplied by firms who have not gone bust — but those people will also pay more.

My firm has not gone bust. Why am I paying more? Because the Ofgem price cap — the maximum amount firms can charge — increased yesterday by £139, to £1,277 per year for an average household.

As a result, half of the population are seeing increased bills as they are on variable tariffs, which companies have bumped up to the level of the price cap.

Who is being hit by even bigger price increases? Millions whose cheap discount tariffs are ending around now. They are being whacked by mega-hikes as firms shunt them on to £1,277 price cap deals.

Why don’t people just get a new cheap fixed-price deal? They don’t exist now. Fixed contracts are no longer cheaper than variable tariffs. The cheapest 12-month option is £1,577 a year.

Has anyone avoided price hikes? Yes — lucky customers who took out fixed-price deals a month or more ago with suppliers who have not gone bust.

Those are paying between around £800 and £1,150 per year for average power use. But when their deals end, they will be forced onto £1,277 variable tariffs.

My company has not collapsed. Why should I pay the £100 Ofgem levy? You have no choice. EVERY household will have to pay the levy next October.

Providers who take on collapsed rivals’ customers are paying a fortune for extra wholesale gas to supply them. The firms have agreed to accept extra customers because Ofgem has assured them they will get their additional customer costs repaid.

The Government will not pay the bill — so the money needs to be repaid through the levy. And it would be unreasonable to expect only customers of firms who have gone bust to pay for this.

‘Ofgem levy is necessary evil for all’

SCIENTIST Max Veltman and his family are among the millions facing price hikes after their previous suppliers went bust.

The 40-year-old, who lives with wife Sarah, 38, a healthcare worker, and their two children in Birmingham, faces paying around £300 more a year on Shell Energy’s variable rate tariff, which he was moved to after his £1,111 discount deal with Green ended when the firm went bust last week.

Max believes Ofgem’s plan to charge all households an extra £100 levy – to pay for the costs of firms going bust – is a “necessary evil”.

He said: “People are trapped paying more expensive variable rate tariffs, with no means of escape, as it’s no longer cheaper to switch to a fixed-price deal.

“The Ofgem levy will be a necessary evil. We’ve all got a collective responsibility to protect vulnerable customers who have lost their supplier through no fault of their own, as their firm went bust.”

Don't give conmen second chance

By Paul Davis, Fraud Director at TSB

FALLING victim to fraud is devastating – and a second time is even more crushing.

For a conman, once is never enough.

If you are targetted, your details are typically placed on a list, which other criminals use to get at you. Again and again.

And this is exactly what happened to a customer we spoke to last week.

This man is in his seventies and has been a brilliant campaigner in helping others to learn from his own, nasty fraud experience.

Last year, he lost several thousand pounds (before receiving a refund) after being conned by a crook.

Recently, he was on the receiving end of another call from a fraudster claiming to be from his bank. And luckily, after initially being taken in, he hung up.


But sadly, others are not so fortunate.

One way fraudsters target victims again is so-called “recovery fraud”.

Just 42 per cent of losses are returned by other banks to victims, new industry data shows. So criminals set their sights on people who might be chasing a fraud refund. The con artists claim they will help get their money back – only to defraud them again. And alarmingly, losses average £14,000.

It pays to be suspicious of any contact you receive. If in doubt, hang up. And remember, fraudsters can spoof a company’s number to make it all seem official,

Do not fall into their trap and be ready to bat them away if they return for more.

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