Ofgem’s price cap – which sets a maximum rate per unit and standing charge that can be billed to customers for their energy use – will rise by £111 for an average household per year, or around £9.25 a month, over the three-month period of the price cap.
The energy price cap sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use.
Ofgem’s price cap determines the amount paid by those households on a standard variable tariff, meaning those who have sought out and signed up to a fixed deal – where the unit rates and standing charges are fixed for the length of the contract, usually a year – are immune.
It is important to note that it does not limit a home’s total bills because people still pay for the amount of energy they use – so if it is above the average they will pay more, and if it is below they will pay less.
This is the largest movement of customers coming off the price cap and on to a fixed deal since the energy crisis.
