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Energy price cap reduced by Ofgem – Uswitch comments

Responding to the news that Ofgem will lower the price cap on standard energy tariffs by £75 on 1 October****, Uswitch.com Head of Regulation, Richard Neudegg, says:

On paper, a price cap reduction seems like good news for household energy bills, but the new level of the cap – which doesn’t kick in until October – is still £333 more expensive than the cheapest deal which people can switch to today.

“Ofgem has been able to make this cut thanks to a significant fall in wholesale energy prices since the start of the year. But for customers who stayed put on standard energy tariffs, the price cap doesn’t pass on cost reductions of the same size or speed as switching does, meaning they’ve been stuck paying higher prices for months when much cheaper deals have been available elsewhere. 

11 million households on credit meters are in line for an average cut of £75 per year. But the four million households with prepayment meters will only see a £25 fall, due to a change in the way their cap is calculated. So those who are often least able to afford their bills are getting less of a cut, and will actually end up paying more per year than households with credit meters. This highlights that a blanket cap is not the best way to help those most in need, and that those people would benefit from more targeted protection.

“The only way for consumers to avoid the roller-coaster price changes we’ve seen with the SVT cap is to take power into their own hands and shop around for a cheaper fixed deal. Locking in a cheap deal now means people can be certain that the price they pay will remain steady for the year ahead.”  

FOR MORE INFORMATION

Tim Dunford

Phone: 020 3872 5612

Mobile: 07785 552666

Email: tim.dunford@uswitch.com

Twitter: @uswitchPR

Notes to editors

  1. For further details, see Ofgem announcement - 7 August 2019

  2. Source: Uswitch data, correct as at 7/8/19. Cheapest deal available is Outfox the Market,’One Variable 6.0’ at £846 per year, based on a household with medium annual consumption paying by monthly direct debit on a dual fuel tariff. 

  3. For further details, see Ofgem announcement - 7 August 2019

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