Categories: Energy News

Energy Price Cap At Lowest Levels

What is the ‘Energy Price Cap’?

Energy price caps are what the UK’s regulator, Ofgem, introduced in April 2017. Ofgem introduced the price cap to “make sure you pay a fairer price for your energy.”

They help those who are on standard variable energy tariff, default tariffs, or prepayment meters and are caps on what you pay per unit of energy.

The then Prime Minister, Theresa May said “Our energy price cap will cut bills for millions of families and people across the UK who have been ripped off by energy companies for far too long. From today, money will go straight back into the pockets of loyal consumers, including the elderly and those on lower incomes who feel the pinch more acutely,”

Ofgem’s latest announcement (October 2020 to March 2021)

Energy bills are set to be lowered for households across the UK as Ofgem cuts its price cap from £1,126 to £1,042 a decrease of £84 for the next 6 months.

Data shows correlation between price cap & cheapest in market tariffs

Data from price comparison website MoneySuperMarket shows a clear correlation between price caps and cheapest in market tariffs:

Source: MoneySuperMarket
Jonathan Jones

Jonathan is the founder of Energy Switching UK. With over half a decade of experience in the price comparison space, Jonathan is now using his expertise and experience to help consumers switch and save money on their energy bills.

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