How you can deal with the expected energy price cap increase
Why is the price cap likely to go up?
This is the first price cap since the beginning of the conflict in the Middle East. Although it began at the end of February, the April price cap running until the end of June had already been locked in. The entire assessment period for the price cap that comes into effect in July has been running in conjunction with the Middle East conflict, so we will see how significantly the conflict has affected energy prices in the UK.
How high will the price cap go?
We won’t know the exact figure until Ofgem announces it on the day, but at the moment it looks likely to increase by about 13%. That would mean it goes from £1,641 to around £1,850 as an annual figure for average usage households paying by Direct Debit.
What should you do?
It depends on your current situation, but there are actions you can potentially take today rather than waiting until the cap comes into effect in July.
If you’re on a standard variable tariff…
…you should be looking to switch to a fixed deal if you can find one that offers savings against the probable new price cap level of around £1,850. Not only will you pay lower unit rates than those set by the price cap, but you’ll also protect yourself going into the winter, when energy usage naturally increases and with the price cap likely to stay around this level or higher.
If you’re on a fixed deal with less than 49 days left…
…you should be preparing to switch to another fixed deal because you can do so without incurring any exit fees. Fixing your deal again will mean you don't get rolled onto your supplier's standard variable tariff, which will be priced at the level of the price cap.
If you’re on a fixed deal with more than 49 days left…
…you can switch to another fixed deal if you can find one priced significantly less than the one you’re currently on. The savings would need to be significant because you’ll probably have to pay exit fees, so those need to be factored into your overall calculations.
Run an energy comparison
Click here to compare energy prices and get started on your energy switch.
For the most accurate long-term view of your costs and savings, you can also compare deals with predicted July changes already factored in - you can't do this anywhere else.
