Ofgem is raising the energy price cap on October 1st
Switch to a new deal before then to lock in a lower price
The energy price cap rise is coming
What can you do to avoid the price hike?
In August 2022, Ofgem announced that it would be increasing the default energy price cap.
This means that if you’re on a standard variable tariff, which you likely will be if you haven’t switched supplier in a few years, you could see your energy bills rise by over £1,500 a year, or more than £100 a month.
The best way to avoid this big increase in your bills, apart from cutting down your energy usage, is to compare suppliers and switch to a cheaper, fixed rate tariff before the end of the month. Read on to find out how to do this with usave and start saving today.
What is the price cap?
The price cap is a measure designed to prevent vulnerable customers from being ripped off by their energy company, by setting a limit on the amount they can charge for an average household. It was introduced by the energy market regulator Ofgem on January 1st 2019.
Initially, the price cap was set at £1,137 a year for an average dual fuel household, but the cap was reviewed twice a year to change in line with wholesale costs. However, since the energy crisis has unfolded in 2022, Ofgem has begun to review the price cap every three months instead. The current price cap is set at £1,971, and has been since a 54% rise in April 2022.
However, this is set to rise by a further 80% in October, to £3,549 per year.
This doesn’t mean that no household can be charged over that amount per year. If you use more energy at home than the average UK household, you will pay more than the price cap over the course of the year.
How much is the current energy price cap?
And when and how is it changing?
Default (standard variable) tariffs
The current price cap for average default tariff customers is £1,971 per year. From October 1st, it will rise by £1,578 to £3,549 per year.
Prepayment plans
The current price cap for average prepayment customers is £2,017 per year. From October 1st, it will rise by £1,591 to £3,608 per year.
Will the price cap rise affect me?
According to Ofgem, around 24 million households in the UK will be impacted by rising energy costs from October. This is the number of customers who are currently on standard variable or prepayment tariffs.
If you’re on your supplier’s standard or default tariff, then you will definitely be affected by the price cap rise if you fail to switch in time. The same goes for prepayment customers.
If you’re on a fixed tariff, then you shouldn’t see any increase in your energy bills from next month. However, you should be aware of the end date of your current contract, as when it lapses you will be automatically placed on your supplier’s standard tariff. If you’re not sure, check your latest bill, or get in touch with your energy supplier right away.
How can I avoid the energy price cap rise?
The best way to avoid being hit by these unprecedented upcoming price hikes is to make sure you’re on a fixed energy tariff. If you’re on a standard or prepayment tariff, compare energy deals with usave now to find a cheaper plan.
Comparing tariffs with us free, quick, and simple. All you have to do is enter your postcode and provide a few details about your current provider and energy usage. You will then be presented with a list of energy suppliers available in your area and the tariffs they offer.
Simply choose one that suits you and we’ll get in touch with your new supplier to complete the switch. The switch-over usually takes place within 14 days, but it can in some instances take up to 21 days to complete.