We are just one month away from the impending energy price cap April 2022 rise. There is a lot of chatter on the internet about what is best to do. We’ve been advised for so long to stick on the price cap as there has been nothing cheaper. However, would we be better to lock in for a year or two now, because it looks like the next price cap in October 2022 will rise again? Let’s have a look at what is going on and what might be best to do.
Everyone Is Different
Firstly, it’s important to remember that everyone is different. We all have varying circumstances about what fixes we’re currently on, when we signed up and when our offers might come to an end. You might not have access to the same deals as another person you’ve seen talking about energy deals online. I’m going to look at this as someone who will be due to be paying the energy price cap April 2022 prices when it rises.
What Is The New Price Cap?
We need to know what the energy price cap April 2022 is and how it changes from the current one.
Gas
Current price cap (until 31st March 2022)
- Unit price: 4.07p per kWh
- Standing charge: 26.12p per day
New price cap (April 1st onwards)
- Unit price: 7.37p per kWh
- Standing charge: 27.22p per day
Electricity
Current price cap (until 31st March 2022)
- Unit price: 20.8p per kWh
- Standing charge: 24.88p per day
New price cap (April 1st onwards)
- Unit price: 28.34p per kWh
- Standing charge: 45.34p per day
Is It Worth Fixing?
It looks like the energy price cap April 2022 hike will be followed by another one in October 2022. We weren’t sure if this was going to happen but all signs point towards another rise. There has been some talk online, especially on social media, about people being offered one or two years fixes which are the same as the energy price cap April 2022 rates. These also have no fees to pay if you were to exit the deal. In this case, you’d be daft not to take the offer. You’ll be locked into those prices that you would have to pay if you were on the price cap anyway. This would enable you to avoid any rises in six months time. If anything changed and prices got cheaper, you’d be able to leave the deal as there are no exit fees.
Some people online have also said they have rang the company and asked for the new deal to start from April 1st 2022. This means you can still pay for the cheaper rates throughout March 2022. Yes you’ll likely be paying a lot more for your energy than you are used to, but it’s about making the best of a bad situation.
Know What You Are Signing Up To
When you sign up to a new deal, be sure you have read all the small print. This includes exactly what you are paying for your daily standing charge and energy unit price. There are reports that a lot of the price hike is being pushed into the standing charge, meaning that even if you figure out ways to save money, you’re still paying out a big chunk of change every day. Be sure that you are happy with what you sign up to.
Would Overpaying Now Work?
I had a thought and I’m not sure if anyone has done this or even if it would work. Have you considered putting in higher meter readings now, to take advantage of the cheaper prices? You’d essentially be paying for more energy at current prices which you’d then be using later. It would work for those without smart meters and could perhaps save you some money. Of course, I’m unsure on this but it could be a money saving idea.
We’re all going to be faced with bigger energy bills over the coming months. There is not a lot we can really do about it. At some point the Government need to wake up and see that people cannot afford to be paying double or even triple what they are used to on energy bills. The help it has provided so far is simply not enough. Until then, we can only do what we can do. Save energy (& hence money) where you can. Look for a cheap (!) fix that works for you. The energy price cap April 2022 is on the way and we need to be prepared for those larger bills.
