New energy price cap announced today (26/08/2022)

08/09/2022 Update:

Liz Truss has released her plan to limit the energy price cap to £2,500 a year for the average home for the next two years. Factoring in the £400 energy payment beginning in October, bills will rise around 6.5% this autumn instead of the previously announced 70%. We’ve updated our utility calculator with the  new unit rates.

Price cap breakdown: April vs August

Can I save by switching suppliers? 

Currently, standard variable tariffs set at the price cap limit are the cheapest available from any supplier. This is because fixed rate tariffs are not subject to the price cap, and currently, no supplier offers a fixed rate tariff below these unit rates. You can fix your tariff at this higher cost to protect against possible future increases but your bills will be higher than the price cap in the interim period, and you will not benefit if the price cap drops in the future. If you would like to fix your tariff you should approach the current energy supplier you use or who is in place at your new property, as the details of these fixed-rate tariffs are only available to existing customers. Martin Lewis’s MoneysavingExpert is also tracking the market right now to see if there are any fixed rate tariffs worth the switch. 

How can I reduce my energy bills?

As energy bills are based on usage, the top way to lower your bills will be to reduce your home energy usage where you can. We’ve published guides on how to save energy during the summer, and how to lower your household bills if your property has a poor EPC. You can also save by switching to a direct debit payment if you haven’t already.

What support will I get for my bills?

In response to the rising cost of living, the UK government has confirmed that every household will receive £400 in energy support from October. This will come in the form of six monthly bill payments of £66.66, made directly to your energy supplier. There’s also further support available for certain households including an increase to the winter fuel allowance, you can read about all of the support available in more detail here.

What happens now?

The price cap will change again on 1st January, with the announcement expected in late November.  Current predictions are that the price cap will rise again, although by less than the latest increase. Many industry experts are encouraging the UK’s as-yet unconfirmed new prime minister to intervene and lower the price cap or take other measures to halt the rise of energy bills. In fact, all the current candidates for prime minister and the shadow cabinet have pledged to take steps to ease the cost of living crisis.

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