The energy price cap is going up this autumn but you’ve still got time to beat the hike and get a better deal.
What’s the energy price cap?
The energy price cap is the maximum price energy suppliers can charge for each unit (kWh) of gas or electricity you use. The price cap only limits the rate, not the total bill – so the more you use, the more you'll spend.
The cap was introduced by energy market regulator, Ofgem, in 2019 to make sure customers on a standard variable rate tariff, also known as a default tariff, were getting a fair price (a price cap already existed for prepayment meter customers). It’s now reviewed twice a year, once for summer and once for winter, and is based on the energy market costs.
Who will it affect?
It’ll affect anyone with a standard variable rate tariff or a prepayment meter tariff. It won’t affect those with a fixed tariff unless it comes to an end.
Why’s it going up?
Put simply, the cost of wholesale gas has increased – post-lockdown demand drove prices to a record high this year.
The latest cap has risen from £1,138 to £1,277*. That’s a pretty hefty 12% increase – the highest it has ever been. It’ll take effect from 1 October 2021 so you’ve still got time to find a better deal. Here’s how to switch in 5 easy steps.
1. Check your tariff
If you don’t already know, check what tariff you’re on. If you’ve not switched recently or if your fixed tariff has ended, it’s likely you have a standard variable rate tariff. This is usually the most expensive one and can go up or down, depending on the price cap. It is, however, easy to leave as you don’t have to give notice or pay an exit fee.
If you’re on a fixed tariff, it’s still worth checking you’ve got the best deal. If you don’t want to switch until your current deal ends, you can set an alert in the Yolt app so you’ll get an email when it’s time to start looking.
2. Be prepared
Once you’re ready, you’ll need the following to hand:
• Your postcode
• The name of your current supplier
• The name of your current tariff
• Your approximate yearly usage
You should be able to find all of this on your latest bill, or in your online energy account. Otherwise, get in touch with your provider – having this information ready will help to make things go smoothly.
3. Do your research
While saving money is key, it’s also a good idea to think about what you want from your energy provider. Do you want some flexibility in your contract? Do you want to go greener? There are flexible or environmentally-friendly options available – in some cases being kind to the planet can also mean being kind to your wallet.
4. Check your account balance
If you pay by direct debit, your current provider may owe you money when it’s time for you to switch – you may have paid for more energy than you’ve used. Before switching always ask your supplier if you’re ‘in credit’ with them to make sure they’ve paid anything you’re owed.
If your account has been in arrears for more than 28 days you can’t switch until you’ve paid what you owe. If the debt isn’t your fault – if your bill wasn't right, for example – you should be able to switch but it's worth checking first.
5. Find your new deal in the Yolt app
Once you’ve got everything lined up, it’s time to look for what deals are out there and how much you could be saving.
You can compare deals with MoneySuperMarket right in the Yolt app. Simply head to the Saving tab and tap ‘Switch your energy’. You’ll need to answer a few quick questions before being shown what you’re paying now, how much you could save, as well as the deals that are available to you.
Once you’ve weighed up your options and found your deal, you can switch.
*Source – Ofgem