Martin Lewis warns that most will still be ripped off when energy price cap falls for 11m consumers
Today the energy regulator Ofgem has announced that the price cap for standard tariffs will be dropping by £17 a year to £1,162 a year for someone with typical usage from 1 April 2020.
Martin Lewis, founder of MoneySavingExpert.com and its Cheap Energy Club, said: “This standard tariff price cut may illicit some mooted cheer, as millions of inactive customers will see their summer energy bills shaved down a touch. Yet the saving is a hollow one. While the price cap is defined as a fair price, a fair price isn’t a good price. If you think you’re doing well on it, actually you’re still ripping yourself off.
“The price cap may have fallen by a smidgeon, but the prices of the cheapest deals have plummeted, and are getting close to 2016 prices. And the price cap is only for six months, while many of these cheap deals are one-year fixed rates, meaning you’re locked in on a low rate for longer.
“So while the new price cap rate from April is £1,162 a year for someone with typical usage, the market’s cheapest deals are a little under £800 for the same usage. And even some ‘big six’ firms often have far cheaper deals available than their standard ‘price capped’ tariffs. For example, British Gas currently has a one-year fixed tariff at £865 a year, which includes a year’s free boiler cover. In other words it’s the same gas, same electricity, same safety, same customer service, but a cheaper price and better terms. Better still, existing customers can get it, saving £300+ a year – but not by calling up and asking, it only makes it available via comparison sites.”