A critical 30-day countdown has begun for millions of households facing a significant rise in their annual utility bills. Experts warn that standard variable tariffs are set to increase by 13% on July 1, unless customers take immediate action.
According to data from comparison service Uswitch.com, the impending change to the price cap, announced by Ofgem last week, will add an average of £221 to annual energy bills. This financial pressure comes at a challenging time, with research showing that a 10% increase would negatively impact the finances of two-thirds of households. One in 10 say they would need to use savings to pay their energy bills, and a sixth would cut back on essential spending, such as food or transport.
Industry analysts predict that rates will climb even further this autumn and remain high throughout the winter months. Around half of the people currently on standard tariffs mistakenly believe they are already on the most cost-effective plan.
What is a standard tariff?
A standard or default tariff is a supplier's basic variable rate, meaning your rate can fluctuate regularly. People are automatically transferred to these baseline rates when their previous fixed-term contracts end.
If you have not changed your energy provider or plan within the last 12 months, it is highly probable that you are on one of these costly standard options. Reviewing your latest statement or online account will reveal the specific name of your current package.
How to avoid the price hike
Transitioning to a fixed contract takes very little time and offers vital protection against the upcoming July increases. Securing a new arrangement now will safeguard your household budget before energy consumption rises again later this year. There are currently 23 fixed energy deals available across the market that undercut the new July rates. The cheapest from Outfox Energy offers savings of £255 against the upcoming price cap.
Ben Gallizzi, an energy expert from Uswitch.com, said: 'For the millions of households on standard tariffs, this is your 30-day warning that your energy rates are rising on 1 July - unless you act now. The price cap is going up, but your bills don't have to. There are 23 fixed deals available that are cheaper than the price cap, with savings on offer of up to £255. These deals might not be around for long, so take a few minutes to check online to see what deals are available to you.'
With the clock ticking, households are urged to compare deals and switch to a fixed tariff before the July increase takes effect. Delaying could mean paying hundreds of pounds more over the coming months.
