Price Cap Is Just The Start

Millions still pay up to £250 a year too much for gas and electricity, despite last week’s cut to the energy price cap, experts warn.

- Harvey Jones

They are urging people to shop around to find the best-priced tariff, rather than relying on the cap to do the work for them.

The cap was introduced last year to stop suppliers charging loyal customers rip-off rates, by setting a maximum charge on average default tariffs. Last Friday, regulator Ofgem cut the cap for 11 million homes on default dual-fuel gas and electricity tariffs by £84 to £1,042 a year. It also cut its cap on prepayment meter customers by £95 to £1,070.

This reflected the sharp drop in wholesale energy costs as the global economy went into lockdown, and will come as some respite for households whose bills have increased as they spend more time at home.