The energy price cap is regulator OfGem’s way of ensuring that customers don’t pay too much for electricity and gas. It sets an upper limit on how much your energy supplier can charge you, and applies to anyone who’s on a ‘standard variable’ or ‘default’ energy tariff – you can check this by looking on your bill.
Ofgem review the cap every six months and decide whether it needs to be adjusted in order to reflect costs more accurately. The next change comes in on 1 April, and will see average household go up by around £20. This is designed to help energy companies cover some of the costs from the Covid-19 pandemic.
It means that those who want a chance of reducing their monthly bills should act now and lock themselves in to a fixed tariff. Having a fixed rate deal would stop you from being affected when the cap is increased. And, if you’ve already been with your existing supplier for several years, it may be able to cut your bills even further. That’s because energy companies tend to offer great sign-up deals, with far cheaper rates than those offered to long-term customers.
How to switch
Switching energy provider is extremely simple. Start by looking on a comparison site – we like Money Saving Expert’s cheap energy club, but there are plenty of others to choose from, and they’ll all compare more or less the same suppliers and deals. Once you’ve chosen a new supplier that suits your needs, you’ll be able to make an application directly to the new company.
From there, everything is handled for you. This means that the new energy provider will get in touch with your old supplier and arrange the switch directly, you don’t need to get in contact to tell them you’re leaving. This process will usually take a few weeks, including a statutory ‘cooling off’ period, which gives you the chance to change your mind without paying a fee.
The only thing you’ll need to do is take a meter reading when requested by your new supplier. This is important, because it will ensure that you pay the right amount and help to avoid any problems with the switch.
What to look for
Most people make the switch in order to save money, but low prices shouldn’t be your only criteria. It’s also a good idea to take a look at reviews and make sure the company you switch to has a good reputation and a high customer service rating.
What if I have a smart meter?
Changing to a smart meter doesn’t affect your right to switch at all. However do be aware that, when you change over to the new company your smart meter may stop offering ‘smart’ functionality. In this case you’ll need to revert to manual meter readings.
Advice for fixed term contracts
If you’re locked into a contract then you may be charged an early exit fee for trying to switch suppliers early. In many cases, this extra fee would cancel out any savings you make by switching. In this case, we would recommend setting yourself a reminder to check again when the contract comes to an end.