When Ofgem announced it was increasing the level of its energy price cap, it was widely expected that suppliers would raise their prices to match. So far, E.ON, EDF Energy and now npower have announced that the rates they charge their standard variable customers will be increased to the new cap level of £1,254.
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For npower customers, this constitutes an increase of just over 10% – its rates were already at the cap limit, and now they are set to be subjected to another price rise. The npower price increase will come into effect on 1 April on the same day as the new cap.
Rik Smith, energy expert at uSwitch, said: “It’s third time unlucky for energy customers as another of the big six suppliers has announced it will be pricing up to the new cap level.
“These announcements are coming like clockwork, shattering the myth that the cap is guaranteeing a good deal for customers on standard tariffs.
“It’s vital that households don’t fall for the price cap con. Since Ofgem announced last week that the level of the cap was going up, over four million customers have already been handed a £490 million confirmed bill increase, kicking in on 1 April. Unfortunately this number is only going to get bigger.
“But consumers can escape the cap trap by acting now. npower’s standard tariff will be £294 more expensive than the cheapest deal on the market today. The savings are real, but the idea that you’re better off under the cap rather than switching is a complete fallacy.”
With three of the big six having now confirmed that their prices are going up in response to the cap, the other three suppliers – SSE, Scottish Power and British Gas – are expected to follow in quick succession. This is an uncertain time for energy customers, but you should always remember that you can take control of your energy expenditure by comparing available deals and switching to a better or cheaper option.