The energy price cap is increasing
The energy price cap is set to rise by 9%! Meaning those on a standard variable rate tariff or a default tariff could be paying as much as £96 more a year for their energy.
From 1 April 2021, the energy price cap will be £1,138. This is an increase of 9% or £96 from the current cap of £1,042.
It's important to note that if you conduct an energy search today, the savings to be made won't reflect the new price cap as energy companies haven't yet updated their rate cards which we use to calculate your savings.
Remember, this is the annual bill value for a standard UK home on standard variable rate tariffs (SVTs) or default tariffs, which are typically the most expensive tariff an energy supplier has. But the energy price cap is a limit on what energy companies can charge per unit of gas and electricity meaning, if you use more energy you’ll pay more than £1,138. Other factors, such as where you live and how you pay for your energy will also have an impact on how much you inevitably pay for your energy.
This is the first rise in the energy price cap for two years, wiping out the £84-a-year cut Ofgem announced in October 2020.
There are approximately 11 million households in the UK on their energy suppliers SVT or default tariff. Currently, the cheapest available tariff on our panel is £188 cheaper than the new price cap.
The chief executive of Ofgem, Jonathan Brealey said: “energy bill increases are never welcome, especially as many households are struggling with the impact of the pandemic.”
We have carefully scrutinised these changes to ensure that customers only pay a fair price for their energy.”
Ofgem has stated that after a sharp fall in wholesale energy prices last year at the start of the first coronavirus lockdown last March, demand for energy has recovered, pushing prices to “more normal levels”.
Alongside the default tariff cap, Ofgem announced the new price cap for prepayment tariffs. From 1 April 2021 the prepayment meter price cap be £1,156, an increase of £87 from the current cap.
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