Millions of households to feel the heat of "brutal" £117 energy price cap increase

7 February 2019

Households are facing potential average increase of £117 on their  annual energy bill as the regulator increases the price cap.

Ofgem, the energy industry regulator has announced that the default tariff price cap will rise by £117 to a total of £1,254 per year from 1 April.

The cap for those on pre-payment meters will increase by £106 to £1,242 per year.

The price cap only applies to households on standard variable tariffs (SVRs), i.e. households that haven't shopped around for a cheaper fixed-rate tariff. 

The new cap level will be in effect for six months from 1 April and could rise again in the autumn depending on wholesale energy costs.

The regulator says the price cap only increases as a result of rising wholesale energy costs.

Dermot Nolan, chief executive of Ofgem, says: “Under the caps, households on default tariffs are protected and will always pay a fair price for their energy, even though the levels will increase from 1 April.

“We can assure these customers that they remain protected from being overcharged for their energy and that these increases are only due to actual rises in energy costs, rather than excess charges from supplier profiteering.”

Ofgem says the price cap protects around 11 million households from higher energy prices, typically a saving of around £75 to £100 a year.

£117 rise “brutal”

Commentators have been quick to condemn the rise. The cap is being criticized for delivering eye-watering price rises by accident and failing to properly protect households from high energy costs. 

Peter Earl, head of energy at price comparison site comparethemarket, says: “The revised price cap level will shock people and usher in a spring of discontent for millions when it comes into force on 1st April. A rise was expected, but a hike of £117 represents a brutal hit to households on variable and default tariffs.

“This increase is a reminder that as Ofgem continues to review the cap, there could be more rises to come in the future. The reality is that the price cap, while well intentioned, will not save people from price hikes - people still need to take control of their own energy provision to have the best opportunity of making savings.”

According to Sally Jaques, head of energy at the auto-switching service weflip, the price cap has unintentionally delivered one of the “single biggest energy price increases the market has seen for years.”

She adds: “Before the cap was introduced, the big six competed on price, with their standard variable tariffs varying by around £50 to £100 a year.  We are now likely to see them all rise, as one, to the level of the cap.

“The cap review reflects wholesale price movements, and these increases would probably have been passed on to consumers by their providers this year anyway. But this increase is the worst possible start for the energy cap and will do little to convince consumers that it is making a big difference.”

Save on energy

It is not all doom and gloom for proactive households however. Switching energy provider, despite higher wholesale costs, can still achieve savings of hundreds of pounds.

The simplest course of action is to shop around on price comparison sites to look for cheaper tariffs. According to price comparison site uSwitch, the cheapest energy deal on the market is currently £286 less than the new level of the price cap.

There are other measures households can take to save on energy too. Moneywise has compiled a guide of 10 smart energy saving tips that include putting foil behind radiators, and how to get underfloor heating in minutes. Find out more.


In reply to by anonymous_stub (not verified)

That is what you get if governments interfere conning you they will save you money, I have noticed fixed term deals have also shot up by even more as they are being used to compensate for this stupid cap, if people want to get lower prices do like most of us do and switch each year or pay the higher price if too lazy.

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