Energy prices set to rise – what this means for you

Standard energy prices were capped from January this year, but the next price cap is set to change in October – find out what this means for you.

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Last November, Ofgem announced an energy price cap that was expected to reduce gas and electricity bills for over 11 million customers.

The cap of £1,137 a year for typical households came into effect on 1 January, 2019 and has seen energy suppliers adjust their standard variable rate tariffs (SVRs) and default tariffs (the tariff you’re put on when your existing deal ends) to this level or below.

However, this cap is set to be reviewed twice a year until 2020 and on 1 April, 2019, it went up by 10%, meaning prices have increased by £117 to £1,254 for customers paying by Direct Debit.

The new cap, announced on 7 August, 2019 will see the cap reduce by £75 to £1,179 and this will come into effect on 1 October, 2019.

The best way to beat the cap increase is by switching your tariff to a better deal and switching again when that deal ends.

How will the August price cap review affect my energy bill?

New research from MoneySuperMarket reveals that the new figure of £1,179 would still sit outside the top 100 cheapest tariffs in the market due to falling wholesale costs, lower rates of inflation and lower smart meter costs. It would also be £259 more than the average of the top 20 deals in the market (£920) and more than £300 than the cheapest tariff on the market.

Stephen Murray, energy expert at MoneySuperMarket, said:

“Crucially, there are more than 100 cheaper tariffs available to consumers in the market today.”

"That means someone switching today could secure a deal that delivers three times the saving the price cap offers, while protecting themselves from this rollercoaster of price fluctuations every six months. It's a no-brainer.”

Why should I switch energy suppliers?

With the energy price cap review set to result in higher energy costs for consumers, the easiest way to bring your bills back down is by switching supplier. In fact, by doing so, you could save at least £243.67* on your bills.

All you need to do is tell us a little about yourself, your home, and your current usage figures – this will help your new supplier calculate a more accurate bill than if it used 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.

What’s more, if you sign up to the MoneySuperMarket app, you’ll receive alerts when you’re able to switch and save at least £50 on your bill.

*51% of customers that applied to switch via MoneySuperMarket could save at least £243.67, May 2019.

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