Avoid the Energy Price Cap


Updated 22nd September 2021

Please note that the advice in this blog is currently out of date due to unprecedented events in the energy industry. The standard tariffs offered by each energy supplier are now currently the cheapest available on the market. Please get in touch if you have any concerns about your tariffs and our advisors would be happy to discuss this with you.

The energy regulator Ofgem announced they were increasing the energy price cap on standard variable tariffs (SVTs) from October 2021. This is in addition to an earlier increase in April this year.

The price cap is in place to control the maximum price an energy supplier is allowed to charge – Ofgem review this periodically.

The current price increase comes as wholesale gas costs across the world have increased to a 15 year high leading to suppliers having to pass these cost increases onto customers.

A household that uses an average amount of gas and electricity will see their prices rise by around £139 if they’re on an SVT or default tariff, and those on prepayment will see a rise of £153. This is a further increase on the £96 price rise in April this year.

This is likely to come as a worry for those who are struggling to pay for their energy.

 

How to avoid the price increase

Standard variable tariffs are the default tariff energy suppliers offer. This is usually their most expensive and they may have other, cheaper tariffs available. You should speak to them to see if this is an option.

Check your most recent bill or online account to find out what tariff you’re on.

If you are on one of these tariffs you could save by switching to a cheaper tariff with a different energy supplier. You can compare gas and electricity prices online to see who will be cheaper.

You should look for the cheapest fix priced tariff as this will be fixed for a set period of time, usually one or two years.

 

 

For more advice on switching:

  • Take a look at our Get Switched on! blog to find out more about switching and what you need to know
  • Energy Advisor Julian discusses switching in his video
  • Energy Advisor Michael demonstrates how you can do an online comparison yourself here

 

Prepayment tariffs

If you pay for your energy through a prepayment meter, there are usually fewer choices of tariffs and any savings are usually smaller than if you paid through a Direct Debit.

It’s still worth looking at switching suppliers though as you may be able to avoid the latest price increase.

 

Cheap fixed tariff coming to an end?

Unfortunately due to the nature of the increase nearly all cheap fixed deals have disappeared from the market. You’ll be unlikely to find a deal as cheap as you were paying before. You should still try get onto the cheapest fixed deal rather than going onto the standard tariff of your supplier.

The below image, produced by Money Saving Expert, shows how the prices have increased for the price cap and for the cheapest deals on the market.

Graph showing how wholesale gas prices and the cheapest fixes have risen since March 2020

Source: MoneySavingExpert

 

Get help switching or worried about this in

Don’t worry if you don’t feel confident comparing gas and electricity prices – our energy advisors can help you complete an energy price comparison to see if you could save by switching suppliers.

If you need help, or if you’re worried about the price increase, Cosy Kingdom is here to help. We provide free and impartial energy advice to anyone living in Fife.

Our energy advisors can be contacted by:

  • Calling 01592 807930
  • Texting COSY then YOUR NAME to 88440
  • Emailing info@cosykingdom.org.uk
  • Request advice online
  • On our Facebook and Twitter social media pages