Energy experts are urging households to reconsider what tariff they’re on in a bid to “absolutely avoid” Aprils’ upcoming price cap rise.
A new forecast from consultancy Cornwall Insight predicts Ofgem will raise the energy price cap by 5% on April 1 – or £85 – to £1,823 a year for a typical household on a standard variable tariff.
However, by opting for a ‘fixed’ or ‘tracker’ tariff, Britons can bag “guaranteed savings” on their bills.
Richard Neudegg, director of regulation at Uswitch.com warned: “Households that haven’t fixed the past year are facing a hat-trick of hurt with the energy price cap, which standard tariffs follow, predicted to rise in April – having also gone up in October and January.
“April’s energy rates are predicted to be 5% higher than today for the majority of homes that haven’t yet taken a fixed deal. Based on this hike alone, if households don’t take action they could pay around £85 more per year on their energy bills.”
The expert noted that those who have not switched in over a year are likely to be on a standard variable rate (SVR) tariff, which means they will be hit with the price cap hikes.
However, he urged: “Consumers can absolutely avoid the price hike.”
He explained: “Fixed deals protect you from price rises for twelve months or more by locking in rates. Switching to a fixed deal at or below the current January price cap level is a no-brainer if you want to avoid the predicted April price rise.”
Those who aren’t ready to fix could consider a different deal, such as a tracker tariff, which Mr Neudegg said “guarantees a saving on the price cap -whether it goes up or down.”
He added: “You can’t rely on the price cap to offer the best value. There are deals available right now that will save you money and that you can switch to in a matter of minutes.
“Today is another warning sign to those on a standard tariff to get off it and lock in a better deal before prices climb further.”
The energy price cap was introduced by the Government in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use.
It does not limit total bills because householders still pay for the amount of energy they consume.
Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets, with the regulator due to confirm the level for April to June on February 25.
People can use calculators on comparison and savings sites, such as Money Saving Expert, Uswitch, or Compare The Market, to find out what tariff could work best for them.
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