Credit, Collections & Insolvency News
Energy suppliers have increased the cheapest energy deals by £180 in a year, since the start of July 2020, with the new price cap level expected to rise for millions of households, according to research from comparethemarket.com.
The increase comes as energy deals have reached the highest cost for more than two years. The average price for one of the cheapest deals on the market is currently £996, the highest point seen since February 2019.
On 6th August Ofgem will announce the cap change from its current ceiling of £1,138.
The price cap, which was introduced in 2019 to stop providers charging rip-off prices to households that do not switch every year, is estimated to rise for millions of households. This is due to an increase in wholesale energy costs and is also partly related to the Covid-19 pandemic.
The rise in energy costs comes as households with children at home say they are struggling with their finances. Separate research from comparethemarket.com found that nearly three in ten (28%) of families with children at home struggled to pay their bills in the past week, compared with 15% of those without children at home.
In order to help people avoid rolling onto a standard variable tariff (SVT), comparethemarket.com has created a tool to help customers compare how much they are paying for their energy with the current price cap level. Customers can also sign up to automated energy savings alerts, to receive regular notifications when a cheaper tariff becomes available to them, as well as getting an alert when their fixed deal is about to expire.
Alex Hasty, energy expert, at comparethemarket.com, said “A further increase to the energy price cap will see energy costs shoot up for millions of households. While suppliers have been increasing prices across the board, it still remains significantly cheaper to switch to a competitive tariff.”
“It should act as a useful reminder that the price cap is not there to serve as protection from hefty price increases and households should be alert to price changes when they take effect. There is plenty of time for those households that might be impacted to take action and save themselves from paying considerably more than they need to for their energy.”
