Energy prices set to rise – what this means for you

Standard energy prices were capped from January this year, but this price cap is set to change in April – 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 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 April price cap review affect my energy bill?

All of the Big Six energy suppliers have said they are increasing their standard variable tariff by the full 10% cap amount. Our analysis suggests that those who haven’t switched away from a standard variable rate tariff could see their energy bills increase by as much as £1bn collectively this year.

Stephen Murray, energy expert at MoneySuperMarket, said:

“April’s £117 rise is even higher than the large increase that was widely predicted, and it deals an even more significant blow to millions of households who were relying on the cap to save them money.

“The cap is determined by a number of external factors, such as the cost of buying energy on the wholesale market, which means it can go up as well as down. All this provides scant protection for consumers, compared to the peace of mind of taking control of your bills.

“If you want to bring your bills down you have to take matters into your own hands. It takes five minutes online to switch to a competitive tariff with a Big Six or emerging supplier.”

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 £331* 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.

*10% of customers that applied to switch via MoneySuperMarket could save at least £331, February 2019.

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