What is the Energy Price Cap?

The squeeze on household finances for millions will take hold as the latest energy price cap takes effect. But, what is the price cap and how does it affect millions of UK households?

 

What is the energy price cap?

The energy price cap was introduced in January 2019 and set by Ofgem, the energy regulator, under government strategy. It sets a maximum price that energy suppliers in England, Wales and Scotland can charge customers on a standard rate, or default tariff.

 

What does the energy price cap mean to UK households?

Today’s price cap will result in a 12% rise in energy bills for around 15 million households, with a typical increase of £139 - from £1,138 to £1,277 a year.

Consumer groups advise that the best way for customers to protect themselves from rising energy bills is to review their tariff and shop around. However, given the scale of the UK energy market crunch, some admit the price cap could prove the best defence in the short term, as energy suppliers are forced to pay record sums in the current market.

 

If entitled, ensure that you claim?

For some of those affected, there are short-term options. Ensure if you are entitled, to claim your Warm Home Discount plus your Winter fuel Payment.

 

Quick energy-saving tips

It is vitally important that households do all that they can around the home to keep their bills down this winter.

In a typical UK household, more than half the money spent on energy bills goes towards providing heating and hot water.

  • Switch all electrical appliances off at the wall, rather than leaving them on standby to save you £35
  • Cut back on the use of kitchen appliances, such as the washing machine, dishwasher, tumble dryer - Washing at 30° can save an extra £9
  • Only fill the kettle with the amount of water required to save £6
  • Turn down your main thermostat by 1 degree, you can save around £60
  • Reducing the time spent in the shower by I minute, could save a family of four £75 a year
  • Turn off the tap whilst brushing your teeth
  • Use a washing up bowl rather than running water and save £25 a year
  • Draught-proof windows and doors
  • Block cracks in floors and skirting boards

 

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