Energy price cap forecast to rise by £150 next month: Households urged to watch their bills before the biggest ever jump in the limit kicks in
- Experts believe the energy price cap will increase by £150 next month
- This is due to rising wholesale costs which have increased 55% since January
- We reveal the best deals on the market you can switch to now
The energy price cap is expected to increase by as much as £150 when the new level is announced next month, experts are predicting.
As a result, standard variable tariffs will prtobably soar to record high, according to Energy Helpline.
The rising cap is mainly due to the wholesale energy market, where gas prices have increased by 55 per cent since January. They are now at their highest level since 2005 and continue to rise.
With wholesale costs making up nearly 40 per cent of a dual fuel bill, experts are predicting a significant increase in the price cap and bills.
The energy price cap is expected to increase by as much as £150 next month, experts predict
This is Money previously reported that the price cap was likely to soar by more than £100 at the next review, according to energy experts at Cornwall Insight.
Ofgem, the industry watchdog, launched the energy price cap in January 2019 as a way of keeping down the cost for households.
It is reviewed twice a year to reflect the costs of supplying electricity and gas for suppliers. The increase will be revealed next month before coming into effect as of 1 October.
Many suppliers price their tariffs right up to the limit and have been accused of treating the cap as a target.
Despite initially being billed as a temporary measure, it has been in place for over two years with the limit reviewed every six months with the next one due in October of this year.
Customers are now being urged to keep an eye on their energy bills as nearly 400 deals will be coming to an end in the coming months.
As a result millions of households who don’t take out a new fixed deal could find their annual energy prices jump up by an average of £300 when the new price cap comes into effect in October.
For all those customers on deals due to end as well as the 11million households currently on SVTs, this will mean monthly energy bills climbing to over £100 – and that is before taking into account the increased usage during the winter months.
To cut bills, customers are urged to use price comparison sites to see if they could save money by switching to a cheaper tariff or moving to a fixed deal, which are typically cheaper than variable offerings.
Customers should watch their energy bills as nearly 400 deals will finish in the coming months
Best deals on the market
This is Money, with the help of Uswitch, have put together a list of the best value energy deals currently available.
All of the ten best deals are fixed tariffs which is no surprise as they are usually the better value offerings.
The best tariff on the market is currently with challenger supplier, Zebra Power, on its Zebra Fixed Rate April 2022 v1 Paperless deal.
The offer costs an average of £1,000.96 a year but isn’t a green tariff and has an exit fee of £60 for those looking to leave early.
The next best deal is with Utility Point on its Just Join Up 21 12M Fixed Wk21 tariff.
For more environmentally conscious households this could be an option as it is a green tariff and costs £1,025.05 a year.
Fellow small provider, Avro Energy, comes in third with its Simple and Flow12M deal costing £1,035.53 a year. Whilst it is not a green deal, there is no exit fee for customers.
Eon is the only Big Six supplier to make the list with its Fix Online v46 deal costing £1,126.18 a month whilst a similar deal with its offshoot Eon Next on its Next Online v6 plan is also the same amount.
|Supplier||Plan||Type||End date||Green||Exit fee||Average price|
|Zebra Power||Zebra Fixed Rate April 2022 v1 Paperless||fixed||12m||N||60||£1,000.96|
|Utility Point||Just Join Up 21 12M Fixed Wk21||fixed||12m||Y||72||£1,025.05|
|Avro Energy||Simple and Flow12M||fixed||12m||N||0||£1,035.53|
|Outfox the Market||Fix’d 21 14.0||fixed||12m||Y||0||£1,058.87|
|GOTO.Energy||Direct Control Green July 2022 V3||fixed||12m||Y||80||£1,077.65|
|Bristol Energy||BE Super Green June23 Issue 13||fixed||25m||Y||0||£1,121.08|
|Orbit Energy||Blue Fix 12 – Apr21||fixed||12m||Y||60||£1,122.08|
|E.ON||Fix Online v46||fixed||12m||Y||60||£1,126.18|
|E.ON Next||Next Online v6||fixed||12m||Y||0||£1,126.18|
|Source: Uswitch (prices correct as of 13 July 2021)|