MILLIONS of energy customers are being charged more than other billpayers as energy bills are set to rise.
A typical household will spend £111 more a year on their gas and electricity bill after the new price cap comes in on April 1 – but some will pay another £119 on top.
The cap is set by the regulator Ofgem every three months.
It limits the maximum amount energy firms can charge households for the units of gas and electricity they use.
But the cap is not uniform and households pay different standing charges and unit rates depending on where they live and how they pay their bills.
It means that millions of households will still end up paying £119 extra per year than those who pay via direct debit or through a prepayment meter.
Around 13 million of the 22 million households on a standard variable tariff pay by direct debit.
Four million more pay for their energy through a prepayment meter, which now has the lowest price cap.
But figures obtained by The Sun from Ofgem show that five million households who pay for their energy via credit, debit card or cheque will pay an extra £119 more for their gas and electricity.
Ben Gallizzi, energy expert at Uswitch.com, said: “Many people like to pay their bills by cash or cheque to monitor their spending, and check the accuracy of their bill before they pay.
“But the disadvantages usually outweigh the benefits.
“Nearly all suppliers offer a discounted price for paying by Direct Debit as it ensures prompt, regular payments.”
Why your payment method affects your energy bill
For most households, the cheapest way to pay your energy bill is via direct debit.
[bc_video account_id=”5067014667001″ application_id=”” aspect_ratio=”16:9″ autoplay=”” caption=”Save money on your energy bills with these cold weather tips” embed=”in-page” experience_id=”” height=”100%” language_detection=”” max_height=”360px” max_width=”640px” min_width=”0px” mute=”” padding_top=”56%” picture_in_picture=”” player_id=”default” playlist_id=”” playsinline=”” sizing=”responsive” video_id=”6343605830112″ video_ids=”” width=”640px”]From April 1 a typical household that pays their energy bill by direct debit will pay the following rates:
- 6.99p per kilowatt hour for gas
- 27.03p per kilowatt hour for electricity
- A standing charge of 32.67p per day for gas
- A standing charge of 53.80p per day for electricity
It means that a household with typical usage can expect to pay £1,849 a year – up from £1,690 a year.
This is based on a medium use household using 11,500 kilowatt hours of gas and 2,700 kilowatt hours of electricity.
But those who pay on receipt of a bill can expect to pay £1,968 over the same period.
This is because these households will have to pay the following unit rates and standing charges:
- 7.35p per kilowatt hour for gas
- 28.45p per kilowatt hour for electricity
- A standing charge of 37.57p per day for gas
- A standing charge of 59.60p per day for electricity
Households who pay for their energy with a prepayment meter will be charged the cheapest rate from April 1.
But be aware that households are at risk of being disconnected if they cannot afford to top up their meter.
Prepayment customers will pay the following rates from April 1:
- 6.78p per kilowatt hour for gas
- 26.20p per kilowatt hour of electricity
- A standing charge of 32.67p per day for gas
- A standing charge of 53.80 per day for electricity
It means that a household with typical usage can expect to pay £1,803 a year.
The exact unit rates and standing charges that you pay will also vary slightly based on your supplier and where you live.
To find out your specific rates check your first gas and electricity bill after April 1.
If you currently pay based on receipt of your bill and want to switch to paying by direct debit then reach out to your energy supplier.
You can set up a direct debit by logging into your online account.