What’s happened to the energy price cap?
As of 1 October 2019, the energy market’s two official price caps have been reduced.
The changes, announced in August by the regulator, Ofgem, affect those with standard variable rate (often called ‘default’) tariffs, and those with pre-payment meters.
The reduction in the level of the caps is to be welcomed, but it’s important to remember that there are over 120 ‘fixed-rate’ deals on the market that cost less than the level of the cap. So don’t assume you’re getting a good deal, even if you’re on a capped tariff – it’s always worth shopping around to see if you could save more.
How do the caps work?
The caps limit how much energy suppliers can charge for each unit of gas and electricity you use if you are on a standard variable or default tariff or use a pre-payment meter.
The new level for standard variable/default tariffs is £1,179, down from £1,254.
For pre-payment meters (this is known as the ‘safeguard’ tariff), the figure is £1,217, down from £1,242.
These figures are based on estimates of the amount of energy a typical family in a typical house might use. The amount you actually pay depends on how much energy you use.
In other words, don’t be surprised if your annual bill is higher or lower and the figures above.
Are the capped deals good value?
No – over 120 cheaper deals are available. The caps exist to prevent energy companies from imposing eye-popping price hikes on their customers. But they’re not meant to be the cheapest prices on the market.
If you’re on a standard or a safeguard tariff, the caps mean your price won’t go up in the next six months (they’re reviewed twice a year). But you could still be paying over £238 a year more than you would if you switched to a cheaper, fixed-rate deal*.
If you’re on a prepayment meter, you can still shop around for a cheaper tariff. And it may be worth exploring whether you can switch from a prepayment to a ‘credit’ tariff, where you pay in arrears for the energy you’ve used.
You’ll need to talk to your landlord if you’re renting to see if this is feasible, and you’ll need to see if you can find a new supplier who’s willing to change your meter. You can find out more about switching from a prepayment to a credit meter in this guide.
Why should I switch energy suppliers?
The easiest way to bring your bills down is by switching supplier. In fact, you could save at least £238* on your bills.
All you need to do is tell us a little about yourself, your home and your current usage figures, which will help your new supplier calculate a more accurate bill than using estimates. Then you’ll be able to compare quotes from providers across the market, from the Big Six to smaller companies, as well as ‘green’ energy suppliers.
Once you’ve found the deal you want, click through to the provider’s website to finalise your purchase and start saving.
Thanks to the Energy Switch Guarantee, your new provider will take care of all the details, your service won’t be interrupted, and you should be on your new tariff within 21 days.
Never worry about switching again
*51% of customers that applied to switch via MoneySuperMarket could save at least £238.25, August 2019.