Millions of energy customers are being urged to switch to a cheaper deal to prevent a 10 per cent increase in bills in October.
About 15 million customers will be affected by higher gas and electricity costs after a rise in the cap on the price of energy was confirmed by Ofgem, the energy regulator, yesterday.
The cap is the maximum a supplier can charge customers on its standard variable tariff (SVT) — the default rate that you will be switched to when your fixed price deal ends.
The average annual bill for SVT customers paying for dual fuel by direct debit will rise £139 to £1,277 in October, when the cap is raised. Prepayment customers’ bills will go up £153 to £1,309.
This will be the second SVT price increase this year because of rising wholesale energy prices. Bills rose about £96 in April. The price comparison website Uswitch said that the best deal on the market is about £240 cheaper than the new price cap.
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Ofgem introduced the cap in 2019 to prevent those who do not regularly switch being exploited by suppliers that automatically put up charges for loyal customers.
The regulator regularly reviews changes in wholesale energy costs and the cap is adjusted, if necessary, in April and October.
Energy costs have gone up more than 50 per cent over the past six months, with gas prices hitting a record high as the world emerges from lockdown, the regulator said.
You can compare deals from different suppliers using websites such as Uswitch or Moneysupermarket.
