Energy price cap to increase in April but consumers should switch to save money | Ofgem
Posted: Fri Feb 05, 2021 12:21 pm
Energy price cap to increase in April but consumers should switch to save money
When wholesale prices fell sharply last year in the wake of the first lockdown, the level of the price cap fell by £84 in October to its lowest level yet for the current winter period.
Demand for energy has since recovered which has pushed wholesale prices back up to more normal levels.
For six months from 1 April the price cap will increase by £96 to £1,138 for 11 million default tariff customers, and by £87 to £1,156 for 4 million pre-payment meter customers.
The price cap protects consumers who have not switched energy supplier by ensuring they pay a fair price for their electricity and gas.
Ofgem adjusts the level of the cap up or down twice a year to reflect the costs of supplying electricity and gas for suppliers.
Households on default tariffs are saving an estimated £75-£100 a year or £1 billion in total on their energy bills as a result.
Consumers who want to avoid the increase and save money should shop around ahead of the increase in the price cap on 1 April.
- Big increase in wholesale energy prices push up price cap by £96 to £1,138 to pre-pandemic levels
- The price cap continues to save consumers up to £100 a year and they can save up to £150 more by switching tariff
- Support is available for those struggling to pay their energy bills, especially those in vulnerable circumstances
When wholesale prices fell sharply last year in the wake of the first lockdown, the level of the price cap fell by £84 in October to its lowest level yet for the current winter period.
Demand for energy has since recovered which has pushed wholesale prices back up to more normal levels.
For six months from 1 April the price cap will increase by £96 to £1,138 for 11 million default tariff customers, and by £87 to £1,156 for 4 million pre-payment meter customers.
The price cap protects consumers who have not switched energy supplier by ensuring they pay a fair price for their electricity and gas.
Ofgem adjusts the level of the cap up or down twice a year to reflect the costs of supplying electricity and gas for suppliers.
Households on default tariffs are saving an estimated £75-£100 a year or £1 billion in total on their energy bills as a result.
Consumers who want to avoid the increase and save money should shop around ahead of the increase in the price cap on 1 April.