THE EXTRA cost of working from home has been revealed in a new study. 

Energy bills are set to be £113 more expensive this quarter than in previous years, according to a new study by comparethemarket.com.

This means that monthly direct debits could increase from £86 to £111 a month because of increased heating costs between January and March.

Why are bills more expensive in the first quarter?

In the first quarter of the year, households typically consume almost 30 per-cent of their annual energy making it the most expensive quarter of the year.

This, combined with the added cost of spending more time at home and the cold snap from Storm Darcy, could see many households face a shock bill of £113 more than would be expected for this period.

Nearly a third of families are struggling to pay their bills

Dorset Echo:

Nearly a third of families are struggling to pay their bills (PA)

Typical households paying £1,042 per year by direct debit, Ofgem’s current energy price cap level, could see their energy supplier increase their monthly payment from £86 per month to more than £111 to cover the additional cost. 

Rising usage is leaving households worried about how they will afford increasing costs. comparethemarket.com’s recent Household Financial Confidence Tracker shows that nearly a third of families with children at home said they had struggled to pay their bills each week.

In addition, 29 per-cent of families with children at home said they are worried about their ability to meet their financial obligations over the coming weeks – more than double the proportion of families without kids in the house who said they had the same concern.

What does an 'increase in energy price cap' mean and how could it affect you?

An energy price cap is used by providers to ensure a standardised maximum price for customers.

Your energy supplier will have to lower their rates if they're higher than the price cap.

In the same way, if the cap levels go up, your supplier could increase their rates to match the cap. This means you'll pay more.

The increase in costs due to working from home comes as Ofgem recently announced it would be increasing its energy price cap level.

Fifteen million households who are on their providers’ default tariff, that do not switch before April, could see their annual bill rise from the current level of £1,042 to £1,138.

The increase of £96 includes an additional £23 that the regulator has allowed suppliers to recuperate from unpaid bills from households that have experienced financial difficulty during the pandemic.   

How can you avoid additional charges? 

Peter Earl, head of energy at comparethemarket.com said: "A cold snap plus the extra energy costs of working from home in lockdown means households could be facing a significant bill shock this quarter."

Mr Earl explained that many people may not realise how much extra energy they’re using during lockdown, until they give an actual meter reading to their supplier, which could add to the shock.

Not only are households facing increased costs due to spending more time at home, Ofgem has also allowed energy suppliers to substantially hike their bills in April through the energy price cap.

He said:

"Considering the significant strain on some household finances because of the pandemic, the increase to the cap could not have come at a worse time.

Mr Earl added that one of the ways to help manage this cost burden is by checking to see if you could get a better deal elsewhere. It only takes five minutes and could save you money on your bills.