Introduced to households in 2019 - 2017 for prepayment customers - the energy price cap was designed to limit the amount suppliers could charge customers on standard variable rate tariffs.
This means around 11 million customers who are relying on the price cap to cut their costs are missing out on a combined £3.5 billion in savings by not switching to a better deal.
To put that into some perspective, the price of the most competitive energy tariffs available has fallen by an average of £73 since October, when the price cap was set at £1,179. And the average price for the top 20 cheapest available tariffs currently stands at £855 – meaning people on standard tariffs could be £324 better off by switching.
Ofgem reviews the cost of the price cap every six months, with the next review due tomorrow (Friday, February 7) when the regulator is expected to drop the cap to its lowest level yet. The new level will then be implemented on April 1.
Ofgem can afford to drop the price cap again because wholesale energy prices have fallen by about 20% since the price cap was last set, meaning it should fall to around £1,114 for credit customers and £1,167 for prepayment customers.
Even so, that’s still hundreds of pounds more expensive than the cheapest deals on the market.
The price cap comes with a number of pros and cons, but switching energy suppliers remains the most effective way to cut the cost of your energy bills.
Switch energy with UKPower and you could save as much as £479* a year.
And switching couldn’t be simpler - UKPower can instantly compare energy prices from suppliers across the market and have you switched within 21 days, which includes your 14-day cooling off period.
Here’s how to compare rates and switch supplier in three simple steps:
You’ll be with your new supplier within three weeks and there’ll be no disruption to your energy supply.
It really is that simple. If you need to know more, check out our energy FAQs.
And you can save even more money by making your home more energy efficient and making a few tweaks to how and when you use energy - you can find some helpful tips and information at our energy saving advice page.
*Between 1 July 2019 and 31 December 2019, at least 10% of people who switched energy supplier for both gas & electricity with Uswitch saved £479 or more.
Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.