Today Ofgem announced that the much awaited energy price cap will come into force on 1st January 2019. The energy price cap is intend to bring to the market price protection for 11 million energy customers on poor value standard variable rate tariffs.
Ofgem announced that it has set the initial levels of the default tariff price cap. For a dual fuel customer paying by direct debit, using a typical amount of gas and electricity, the price cap is set at £1,137.
Customers who have not switched at all are likely to be on a default standard variable rate. Ofgem estimates that a typical standard variable rate customer will save around £76 a year, with those on the most expensive standard variable rates, will save around £120 per year.
The cap will be updated in April and October each year, and will depend on the method of payment, geographic location and the type of energy meter. Therefore, individual savings will vary. Ofgem estimates that the price cap will cut around £1bn from bills of those consumers on a standard variable tariff.
The cap is a safety net for those customers who don’t switch or who are not worried about paying extra for their energy. Those consumers wanting to save more money should either switch providers and move to a fixed energy tariff, or contact their existing provider and move onto a fixed tariff.
If you have your household energy listed in your Bills Dashboard account, then you can easily switch within your Bills Dashboard account. Contact us if you have any questions about your Bills Dashboard account.