Ofgem announced last week that the safeguard price cap in place for five million consumers will rise from 1 October. Primarily a prepayment meter cap, this cap on energy tariffs was extended to an additional one million vulnerable customers receiving the Warm Home Discount. The limit of the cap will rise by £47 to £1,136.
The energy regulator says that the increase is down to the rise in the wholesale cost of energy since the cap was last updated in February.
Following Ofgem's announcement, British Gas revealed it has to raise the cost of its standard variable tariff (SVT) for the second time in 2018 — leaving some to believe British Gas is hiding behind Ofgem’s prepayment price cap increase, to hike its own prices again.
British Gas' standard variable tariff was already one of the most expensive in the market, and from 1 October it will get £44 a year more expensive for the average customer. This latest 3.8% price rise, combined with a price rise that came into effect at the end of May, results in a total average bill increase of over £100.
The last time British Gas announced more than one energy price rise in a year was 2010.
Uswitch energy expert Rik Smith believes price rises are pushing more people to look for a better deal: "The only silver lining is that households are switching and saving in greater numbers than ever before. So far this year 2.7 million people have voted with their feet and ditched their supplier".
2018 has seen a raft of price rises, and if you're affected by them there's a good chance you could find yourself a cheaper deal elsewhere.
Price rises only affect variable tariffs, which are usually a supplier's most expensive tariffs to begin with. Many suppliers who have also announced price rises this year have cheaper fixed deals on offer — where the rates you pay can't change for the duration of the fixed deal (often 12 months).
Run an energy comparison to see who could save you money. You'll need a recent bill to hand, and just 10 minutes of your time.
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