Ofgem, the UK’s energy industry regulator, previously announced that there will be a rise in the price cap from 1st April 2021 for some of the most common energy tariffs.
Will this affect you?
The price cap only affects a certain type of tariff known as a ‘default’ or ‘standard variable. This is one of the most expensive types of tariffs on the market. Therefore back in 2019, a price cap was introduced to help stop customers overpaying for energy and to set an amount that suppliers could charge. The recent increase that started this April, will see households on average paying just under £100 more a year in energy.
Late last year saw the price cap plummet to its lowest since the start of 2019. This was due to energy demand dropping in the first national UK lockdown. Since then, the demand for energy has increased and has caused a spike in price. What does this mean? Well, the price cap will increase by £96 for 11 million default tariff customers and £87 for 4 million pre-payment meter customers for the next 6 months.
What action should you take?
Here at Green Energy Switch, we offer a free online service to compare the best green energy tariffs. All of our tariffs are ethical and have been carefully selected for competitive pricing and highly rated customer service. It’s a simple and easy process, all you need to do is go to our online comparison tool, fill out a few simple details and we will compare the best tariffs for you. We offer both a range of fixed and variable tariffs.
Any questions you can call the team on 01733 646253 or email firstname.lastname@example.org
For more information, please visit the Ofgem website.
The energy price cap was designed to protect customers from the most expensive tariffs, but at certain times of the year, it can make potential switching savings appear smaller than they really are. Here, we explain why that is and what you can do about it.
What is the price cap?
The price cap is a limit on how much suppliers can charge you per unit of energy you use. It only applies to customers who are on a certain type of tariff, known as a ‘standard variable’ or ‘default’ tariff.
How is the price cap set?
Ofgem, the UK energy regulator, adjusts the price cap twice a year – at the beginning of April and at the beginning of October. The level of the cap reflects the prices suppliers have paid in the preceding six months for the energy they sold to households.
If the cost to suppliers in the previous six months was low, the price cap will below. If the cost was higher, the price cap will be higher. Here’s how the price cap has changed since it was first introduced:
The price cap trap
Since the most recent price cap was set in summer 2020, the price paid by suppliers for the energy they sell on to households has been rising. As a result, suppliers have raised prices for those tariffs not covered by the price cap. These deals are normally much, much cheaper than the default tariffs governed by the cap, but have recently begun to look less competitive relative to the price cap.
This is where the price cap can cause confusion. If you’re on a ‘default’ tariff, the relatively small savings at the moment could put you off switching. But, the price cap is expected to rise by almost £90 for a typical home at the end of March as recent price increases on the energy markets kick in. That means that customers on standard variable tariffs in April are likely to see the amount they pay increase, too.
On a default tariff?
Above all else, if you’re on a ‘default’ or ‘standard variable’ tariff then there is one rule to remember – you are almost certainly paying too much. Even if your projected savings look to be less than £100, that is still money that you could be using for other things. If you’re in that situation, think seriously about switching now, and come April when the price cap increase takes effect, take a moment to pat yourself on the back! Start your quote at https://www.greenenergyswitch.co.uk/switch-energy-tariff/
LEAP (Local Energy Advice Partnership) is a completely free service run in partnership with Peterborough, Rutland, Fenland and South Cambs local authorities and aims to tackle fuel poverty. As many of you are aware, we are approaching the end of the scheme year for LEAP, however we are delighted to let you know that we be continuing to offer some telephone-only energy and income advice services in our LEAP areas under the service name, “Connect for Help”, a programme funded by the Warm Homes Fund.
Please note that this service does not offer home visits or small measures like lightbulbs and draughtproofing. However, it does still offer all the advice services including the benefit entitlement checking and income maximisation.
As usual we rely on our referral partners to refer eligible households, vulnerable tenants, homeowners on low income into the scheme, here is how you can refer: