Price Cap Saved Billpayers £1 Billion on Energy in 2019

11 million consumers saved as much as £1 billion on their energy bills in 2019 under the energy price cap, the government has claimed.

The price cap, implemented on New Year’s Day 2019, saved households on default energy tariffs between £75 and £100 on their dual fuel bills this year. Many of those who saved were elderly and vulnerable customers, who are less likely to switch energy supplier.

Although hiked by £117 in April, in response to rising wholesale energy prices, the cap was lowered again in October. It currently stands at £1,179 for a dual fuel household with typical use.

Minister of State for Business, Energy and Clean Growth, Kwasi Kwarteng, said: “Our bold action to ensure all consumers pay a fair price for their energy is making a real difference to the budgets of up to 11 million households and driving increased competition and innovation in the market which will help keep bills down.”

Chief Executive of Ofgem Dermot Nolan said: “The price caps give consumers who are on default deals peace of mind that they pay a fair price for their energy. Ofgem set the cap at a level which required suppliers to cut energy bills by around £1 billion.”

However, energy users shouldn’t rely on the price cap to guarantee them the best price, both Kwarteng and Nolan said. Switching to a new energy supplier can save households up to £290 on their bills, according to government figures.

More households than ever are pursuing deals from more than 60 energy suppliers. 4.4 million electricity customers and 3.6 million gas customers switched supplier in the nine months to September, according to government figures. Trade association Energy UK has forecast that electricity switches for the year will surpass six million, breaking 2018’s record of 5.8 million switches.

Dermot Nolan said: “Consumers can save more money this winter by shopping around for a better deal. While the cap remains in place, Ofgem will continue to work with government and industry to put in place reforms to get the energy market working for more consumers.”

The price cap is due to run until 2023. It will next be adjusted on 1 April, with the new level to be announced by Ofgem sometime in February.