Power price cap extended until finish of 2021

The energy price cap is going to be extended until the end of the coming year, the government has announced.

It means around 11 million families will continue to save on gas plus electricity bills, according to the Department for Company, Energy and Industrial Strategy (BEIS).

It said the particular cap had saved customers close to £1bn – around £75 in order to £100 a year for a typical home on a default energy tariff.

Four million more families with pre-payment meters on arrears tariffs will also come under the cap’s protection in January.

Business and Energy Secretary Alok Sharma said: “The energy cost cap has been vital in making sure customers do not pay too much on the bills, which is why we are keeping this in place for at least another yr.

“Switching energy supplier to find the best worth deals is still the best way to save on expenses, but this government is determined to ensure all customers are treated pretty and get the protection they should have. ”

The cover on bills started in January this past year and was aimed at ending exactly what Theresa May, prime minister at that time, called “rip off” prices.

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It is calculated using a formula which includes wholesale gas prices, energy suppliers’ network costs and costs associated with government policies, such as renewable power financial aid.

It is adjusted two times a year and is aimed at helping those people who are least likely to shop around, such as seniors.

BEIS said about 2 . 8 million electricity plus 2 . 1 million gas clients switched suppliers in the first 6 months of this year.

Yet this leaves more than half of families on standard variable or arrears tariffs where, without the cap, they might “likely still be paying excessive charges”.

In August, power regulator Ofgem recommended extending the particular cap, as it announced the level for October 2020 till March 2021 would be £1, 042 for usual users paying by direct charge.

Ofgem’s chief executive, Jonathan Brearley, said it would “continue to safeguard consumers in the difficult months forward as we work with industry and govt to build a greener, fairer power system”.

Richard Neudegg, head of regulation at Uswitch. com, said: “The only method to escape high bills and ensure you are not paying more for your energy compared to you should is by switching to some cheaper deal. ”

He said there was currently the £186 difference between the price cover and the cheapest fixed deal upon Uswitch. com, describing this as being a “significant saving for anyone who is out of agreement with their supplier”.

Philip Earl, head of energy at Comparethemarket. com, added: “There is a real danger that the British public interpret the particular government’s extension to the price cover as an endorsement that the cap is definitely an affordable price to pay for energy, in order to reality it should be considered the absolute roof that people pay.

“There are currently 191 energy tariffs out there cheaper than the £1, 042 cost cap, and as the temperature falls and people turn the heating up the notch or two, switching to some competitively priced one or two year fixed-rate deal is an effective way for households in order to lock-in a cheaper energy deal. inch