What is the energy price cap?

What is the energy price cap?

Introduced on the 1st of January 2019, the energy price cap limits how much energy providers can charge you for your average energy usage each year and applies to all suppliers. The cap means that, theoretically, a typical home shouldn’t pay more than £1043 annually for their energy supply. The level that these caps are priced at is based on Ofgems calculations of how much suppliers need to spend in order to provide homes with their energy supply.

However, these caps only apply to consumers on their suppliers default tariffs – for example, if you’re on a fixed-term energy tariff your prices will not be protected by the price cap. Default tariffs actually tend to be more expensive than other deals, so switching to a different, cheaper tariff or supplier (we can help you find a better deal!) may actually end up being more cost efficient than having a default tariff that includes the energy price cap anyway!

Another thing to note about the energy price cap is that the cap affects the rates you pay per unit of gas or electricity and it doesn’t actually limit the total amount the consumer would pay. So, if your household uses more energy than an average household, you could end up paying more than the price cap.

Although on the surface the introduction of the energy price cap might seem like a positive for all energy consumers, when you dive further into the cap details you discover that to get the most out of the caps you have to match certain criteria. It’s worth checking your tariff to ensure you’re not missing out on any better rates.

If you’re thinking about switching broadband, utility or life or medical insurance provider we’re here to help you out. By answering a few questions (like what speed you require for a new broadband deal) we can compare all the suitable deals to find the ideal package for you that won’t cost a fortune.