Better Deals Available After Energy Price Cap Begins
The new energy price cap is in place now, but customers can still find better deals by shopping around. This is true even if households and businesses on standard variable tariffs are paying a fairer amount now.
The price cap should save around 11 million customers about £76 per year. However, there could be even more savings to be made by shopping around and finding supplier offering a better deal.
Shop Around and Increase Energy Efficiency to Save Money
The Chief Executive Officer of Citizens Advice, Gillian Guy CBE, believes shopping around is a good idea. She said,
“The introduction of this cap will put an end to suppliers exploiting loyal customers. However, while people on default tariffs should now be paying a fairer price for their energy, they will still be better off if they shop around.”
Guy, who received the Commander of the Most Excellent Order of the British Empire award for her charitable work, added,
“People can also make longer-term savings by improving the energy efficiency of their homes. Simple steps, such as better insulation or heating controls, are a good place to start.”
Why There is a Energy Price Cap
The price cap only affects default energy tariffs, usually called standard variable tariffs. These are basic energy packages that usually include higher rates than other tariffs.
Customers who do not actively renew their normal tariff can find themselves ‘rolled’ onto a standard variable tariff. This allowed energy suppliers to charge customers at the higher rate than they normally would. The price cap is intended to stop this practice.
How the Energy Price Cap Works
The price cap does not limit the amount you will pay on your bill. It only applies to the amount suppliers can charge per unit of electricity and gas on the standard variable tariffs. For a duel-fuel customer (who gets their electricity and gas from the same supplier), the cap is set at £1,137. That particular amount is also only for duel-fuel customers who pay by direct debit.
Ofgem intends to update the energy price cap amount twice a year to reflect the genuine wholesale costs of energy. The price cap reviews will occur in April and October every year.
Energy Price Cap Set to Rise Already
Affected customers should be aware that the cap is likely to rise during the very first review this coming April. This is due to the recent price rises in wholesale energy which the suppliers must pass on to the customers.
Although if you know you’re on a standard variable tariff, then you should shop about for a better deal anyway. Customers on standard variable tariffs are not usually tied into a contract. This means they will be able to switch suppliers much easier than if they did have a contract.
To learn more about the better energy tariff deals available now the price cap has been implemented, contact Business Save and their team of highly experienced energy experts.