What is the Energy Price Cap?
From the 1st January 2019, the price of your energy tariff is capped if:
- You use a pre-payment meter
- You are on a ‘standard variable’ energy tariff or on a tariff you haven’t chosen (a ‘default’ tariff).
Energy price caps limit what an energy supplier can charge you per unit (kWh) of electricity and gas. It is important to be aware that it is not a cap on your total bill, which will continue to vary depending on how much energy you use.
How does the energy price cap work?
The energy price cap limits the amount an energy supplier can charge customers who are on its standard or default tariffs. The cap sets a maximum level for each unit of gas and electricity you use, and a maximum level of the daily standing charge (what you pay for being connected to the gas and electricity grids).
The cap is set by Ofgem and will be calculated twice a year (April and October) until 2020.
Is it still worth switching?
YES! If you have just been moved to the capped default tariff, you may now be paying less. Ofgem estimates a ‘typical’ household would save an average of £76/year. However, if you decide to switch to a new energy tariff, you could save over £200/year.
For more information on switching, click here.