Monday 22 October 2018
Energy price cap ‘won’t support three in 10 dual fuel tariffs’
The government’s energy price cap will not reduce bills for customers on three in 10 dual fuel tariffs.
Some energy deals could cost almost £200 more than the cap per year for a medium energy user even after it comes in effect at the end of this year, according to Which?
It found more than 70 fixed tariffs are more expensive than the proposed energy price cap – applied to default tariffs - which Ofgem suggests will save householders £75 a year on average.
The priciest stood at £1,332 a year for a medium energy user - £196 more than the average price cap of £1,136.
The research also found 98 tariffs cost less than the proposed cap, with the cheapest deal costing £258 a year less on average.
The consumer group suggests medium energy users who are on the most expensive Big Six standard tariffs would save £121 a year on average with the cap, however, they could save £378 annually by switching to the cheapest available deal.
The price cap will be set at different levels across the UK, depending on how much it costs to provide gas and electricity to a particular region.
It will be the highest in the South West at £1.173 per year - £37 above the average – and the lowest in Yorkshire at £1,110 - £26 below the average.
However, the actual amount paid by consumers will still depend on their energy consumption regardless of whether their bills are capped or not.
Alex Neill, Which? Managing Director of Home Products and Services said: “While this cap may cut energy bills for some, people shouldn’t be lulled into a false sense of security that they are getting the best deal. As our research shows, the cap won’t cut everyone’s bills and you can save more by switching.
“The price cap is only a temporary fix, what is now needed is real reform to create competition, promote innovation and improve customer service. If you are unhappy with your current energy provider, you should look to switch now to another supplier and potentially save almost £400 a year.”
Predicting energy costs for businesses will be discussed by npower at Energy Live Expo on 31st October, with Energy Minister Claire Perry headlining the event. To book your place (free if you are an end user), you can send an e-mail to tickets@energylivenews.com.
