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Millions of Britons could be at risk of overpaying their energy bill if they fail to submit a meter reading before next week’s price cap increase.
The more than 7 million households on standard tariffs have been advised to take action before their gas and electricity bills go up next Wednesday.
Those on standard tariffs who do not have a smart meter and do not submit meter readings on or about 1 October risk having some of their September usage charged at the new higher rates, the comparison site Uswitch warned.
The difference for just a week’s worth of energy at September rates compared with October is £17 for each home, it estimated. If 7 million households do nothing and are charged incorrectly, it would add up to a total overpayment of £125m.
Ofgem sets a price cap on how much suppliers can charge customers for each unit of gas and electricity every quarter by using a formula that tracks wholesale energy prices, as well as providers’ network costs.
On 1 October, the cap, which reflects the typical bill for about 29m households, will increase 2%, or the equivalent of just over £35 a year, to £1,755 for a typical annual dual-fuel bill.
A Uswitch energy expert, Ben Gallizzi, said households “should take a moment to read their energy meter in the coming days to avoid the possibility of being charged at October’s higher energy rates”.
“Customers who don’t have a smart meter should submit their readings before or on Wednesday 1 October, so their supplier has an updated – and accurate – view of their account,” he said.
He added that it was “worth seeing if your supplier offers any free energy schemes at off-peak times, which can save a lot of money”.
A fifth of households without smart meters have not submitted meter readings in the past three months, and 6% have not done so for a whole year, according to Uswitch.
Not submitting readings means suppliers base bills on estimated usage – meaning some households could be overpaying, and others not enough.
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Global instability and uncertainty in wholesale energy prices mean that many analysts anticipate the price cap will increase again next year. This means that households could face another energy price rise within the next six months.
But after a period when competition on energy deals has been lacking, it is once again worth shopping around to get a better fixed deal. There are now 25 fixed deals available that are cheaper than the October price cap.
“The cheapest on the market are now coming in more than £215 below the cap, but households need to act fast to lock them in,” said Scott Byrom, the chief executive of The Energy Shop.
“The very best tariff currently available is Outfox Energy’s 12-month fix at £1,540 a year. That’s a saving of £214.63 compared with the new cap.”
