The Harvest Moon has graced us with its presence, meaning we are well and truly into the autumnal months. And with the temperature gauge plummeting over the past couple of weeks, we can definitely get to sleep more easily…but can we sleep more soundly with the news of an energy price cap on the horizon?
Price cap to be in place by end of 2018
At the start of September, regulator Ofgem proposed an energy price cap to give 11 million customers a “fairer deal for their energy”. This follows Parliament passing the Government’s Domestic Gas and Electricity (Tariff Cap) Act, which became law on July 19 and gives Ofgem the powers to put the price cap in place.
This energy bill price cap of £1,136 a year is being introduced in late December and will stay in place until 2023. Essentially, suppliers will have to cut their prices to equal or below the price cap, with the aim to force suppliers to scrap excess charges for customers on default tariffs, known as standard variable tariffs (SVT).
How much will I save?
If you are on one of the standard tariffs – and if you haven’t switched supplier in recent years, then you most likely are – it is said the cap would save consumers who use a “typical amount of gas and electricity” around £75 per year on average. According to Ofgem's definition, a typical customer uses 3,100 kWH of electricity and 12,000 kWH of gas in a year. However, the exact savings each customer will make depends on supplier, energy usage, if you pay by direct debit and if you are on a dual fuel tariff. For example, those on Scottish Power’s SVT will save £121, while those on SSE’s SVT will save £60.
Is this too good to be true?
So…can we all sleep soundly tonight with the heating on with the knowledge our energy prices are soon to be capped? Martin Lewis, founder of MoneySavingExpert.com, says not: "The savings are still pitiful compared to the amount people would get if they switched and went to the market's cheapest providers – but there is a real concern the imposition of a cap will give people a false sense of security that doing nothing is fine.”
Stephen Murray, energy expert at MoneySuperMarket added: “There are more than 100 tariffs available right now which are cheaper than the proposed level of the price cap at £1,136."
Bottom line…SWITCH NOW!
Don’t wait for the price cap to save you money on your energy bills! If the average savings is £75 per year, it’s still more important than ever not to be complacent and stick with your current supplier. Let Smarter Power help you switch TODAY!!