Friday, August 12

Household energy price cap to be reviewed as gas and electricity prices soar

It comes as wholesale gas prices-the price energy suppliers themselves pay-have risen by up to 250% in recent months, while 13 suppliers have gone out of business since September alone. There are fears the price cap could rise again from April given it’s based on wholesale energy prices now.

Ofgem wouldn’t comment on what impact its review could have on the price cap-it would only say that it’s aim is to “ensure it appropriately reflects the costs, risks and uncertainties facing suppliers”. A consultation will be published in November with a final decision expected in February 2022 ahead of April’s new cap taking force.

The price cap currently changes twice a year; in April and October. The current cap, which was announced on 6 August and took force on 1 October, rose sharply by 12% (£139/yr on average) compared to the previous cap, and means the maximum households on a standard variable tariff now pay is £1,277/yr on average. founder, Martin Lewis recently told households to do nothing and to go onto the price cap when their current tariff ends as there are no fixes cheaper than the price cap at present. Martin also warned that it’s important to avoid pressure to switch to a new fixed energy deal once your current one ends.

Thirteen energy firms have collapsed in the past two months

Since September, 13 UK energy firms have collapsed affecting more than 2 million households. The table below details the collapsed firms and their so-called’suppliers of last resorts’, which are the firms directed by Ofgem to take on households who were previously customers of the defunct firms. If your energy supplier has gone bust you can see how your new firm and new tariff stack up in our news story.