How to work out the true cost of your energy bill from October
Forget rising interest rates. The increase in the energy price cap from October 2022 is going to hit the vast majority of us pretty hard.
While there isn’t much you can do to prevent these prices rises – there really is only so much switching off at the wall and turning the thermostat down that you can do – you can at least start working out just how much your energy bills are going to increase by.
Unfortunately, the headlines in the press don’t make it easy to figure out just what you are going to pay come October.
Current maximum prices for energy
£0.28 per kWh
Daily standing charge: £0.45
£0.07 per kWh
Daily standing charge: £0.27
This is your starting point. If you’re on a standard rate with your current energy provider, its likely you will be paying this for every unit of energy you use.
It won’t affect you if you:
· are on a fixed-term energy tariff
· have chosen a standard variable green energy tariff Ofgem has exempted from the cap.
From 1st October 2022, the maximum price you'll pay for electricity and gas is forecast to increase by 70%
Predicted energy prices from October 2022
£0.47 per kWh
Daily standing charge: £???
£0.12 per kWh
Daily standing charge: £???
The Daily Standing Charge is harder to predict. At the last price cap increase in April, the gas standing charge only increased by a penny, but the electricity standing charge increased by 20p (nearly 100%!). But the standing charge seems to vary from supplier to supplier and can even fluctuate throughout the year.
For context, the current maximum combined standing charge is around £21 a month.
To work out your predicted monthly bills from October, do the following:
1) Find your most recent energy bill
It will either be online, on an app or even a paper bill if you have these.
It will contain a section detailing your payments, usage, meter number and estimated usage for the last 12 months.
The estimated usage is usually fairly accurate and will factor in meter readings you’ve sent (or have been done through your smart meter).
So for me, my estimated usage for 12 months is:
2) Now for a bit of maths
Take your estimated 12-month usage and multiply by the predicted prices in October 2022.
So my calculations are:
2495 x 0.47 = £1172.65
6380 x 0.12 = £765.60
Then divide by 12 to give you an estimated monthly amount (bearing in mind usage will be higher in the winter and lower in the summer)
So from October 2022 my predicted monthly energy bills will be:
£97.72 for electricity
£63.80 for gas.
Based on current standing charges, I’ve added £30 a month in total for these. If you only have electric, I’d add £20. This is a ballpark and being extra cautious. Nonetheless, its an added increasing expense to be aware of.
That brings my monthly total to £191.52
3) Add in the government £400 discount
From October 2022, all households with an energy account will get a discount of £400 off their energy bill. You don’t get £800 if you have electric and gas. This will be taken off your bill as follows:
£66 in October
£66 in November
£67 in December
£67 in January
£67 in February
£67 in March
If I take £66 off the figure I’ve just calculated, that gives me a total bill of £125.52.
Now none of this is an exact science. But it will give you a clearer idea of what your personal energy bill will be once prices rise in October.