The energy regulator Ofgem has announced its latest energy price cap which, from the 1st of April 2021, will see a rise of £96 to £1,138 for the 11m customers on standard variable tariffs (SVTs) and a rise of £87 to £1,156 for the 4m pre-payment meter customers.
This is the first rise in two years and a notable jump from the £84 cut that was last seen in October 2020. Ofgem has explained that the increase is as a result of rising wholesale costs and the demand for energy recovering when compared to the first lockdown last March.
Ofgem has also suggested how the increased demand has since pushed prices to more normal levels and the new cap is a reflection of this situation. However, it did add that the cap still continues to help make savings of up to £100 on our energy bills, but at the same time, encouraged affected consumers to run an energy price comparison to find and switch to a cheaper deal with a new supplier.
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Switching is the ‘best way to get the best value’
Speaking to Sky News (opens in new tab), Ofgem chief executive Jonathan Brearley offered further comments on the price increases and reaffirmed the benefit of comparing the markets and switching:
"We recognise that this is a difficult time for many people due to the COVID crisis. The reason we have done this is that wholesale energy prices have changed, particularly globally the gas price has changed, and we need to reflect that in the price cap that we use."
"The best way to get the best value out of this market is to get in and switch your supplier. You can do better than this price cap we estimate by around £150. But for those people who are struggling, contact your supplier, get onto a better tariff, but equally get access to the support that is in place for you."
"We have worked very closely with the industry to make sure that customers who are struggling with their bills are looked after as best we can through this pandemic."
There is still time to switch
As the new cap doesn’t come into effect until April 1st 2021, there’s still time for households to use a comparison service. This will allow you to see the best energy deals from some of the country’s best energy suppliers.
The whole process is quick and easy and there’s the potential to make great savings on your bills by switching. Plus, it’s something available to all consumers regardless of whether or not you’re on the affected SVT.
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