Ofgem’s announcement that it will raise the level of the energy price cap may only be a few days old, but providers have wasted little time revising their prices to meet the increased cap. This week, E.ON and EDF Energy became the first of the big six energy providers to confirm that they will be charging their standard variable tariff customers the new cap level of £1,254 from April.
This constitutes an increase of £117 for E.ON customers and £118 for EDF Energy customers, working out at just over 10%. According to Rik Smith, energy expert at uSwitch, the suppliers’ decision to raise prices in response to the cap isn’t a surprising one.
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Rik said: “As soon as Ofgem increased the price cap level it became almost inevitable that most customers on standard deals would see their bills rise right up to the cap.
“Energy customers should not fall into the cap trap – a capped deal is not a good deal and standard plans are going to be more expensive in April than before the cap was introduced.
“The limit set by the regulator effectively dictates how suppliers will purchase gas and electricity for their standard tariffs, restricting room for suppliers to differentiate themselves, and passing through cost changes swiftly.
“Standard tariffs were a bad deal at the old cap level and they’ll be an even worse deal at the new level.
“There are hundreds of pounds to be saved by switching to a good value fixed deal. In a few minutes consumers can beat the rise rises and avoid confusing price rises every six months.”
These are likely to be the first of many such price rises reported between now and April, when the new price cap rates come into effect. The most reliable way you can ensure that you’re on a cheaper deal is to switch. Click below to find out more about the energy price cap or how uSwitch can help you move to a better deal.