- 1st October price cap failing to save people money – £324 average savings for those who switch from a standard variable or default tariff to the most competitive fixed or variable rate tariffs
- The best priced fixed and variable rate tariffs have fallen by an average of £73, while the price cap level has stayed at £1,179
- Just 16% of households have heard of the price cap and can explain what it is
3 February 2019 – New research from comparethemarket.com reveals that by switching to one of the most competitive fixed or variable rate tariffs on the market people could save on average £324.
Ahead of the energy price cap level revision on 1st April, where we’ll see it move from its current ceiling of £1,179, comparethemarket.com’s new Price Cap Update shows that the average price for the top 20 cheapest available tariffs on the market is £855 – meaning people could be £324 better off by switching.
Since the introduction of the current price cap level on the 1st October, prices in the market have dropped, with the average cheapest available dual fuel tariff falling by £73, from £928 to £855. Even if the price cap was to fall by the equivalent amount, consumers would still be more than £250 better off by switching provider.
The growing price gap between the most competitively priced fixed and variable tariffs and the prices charged to those on standard variable or default tariffs, means that the 11 million* customers stuck on a default or standard variable tariff (SVT) are collectively missing out on a combined £3.5 billion average savings by not switching to a competitively priced tariff.
Awareness amongst households about the energy price cap is very low. Almost a third (32%) have not even heard of the price cap and more than half (52%) have heard of it but cannot explain what it involves. Just 5% of consumers can say what the current price cap level is.
In order to help people avoid lapsing onto a SVT, comparethemarket.com customers can sign up to automated switching service AutoSergei, the latest innovation to come from the Simples Lab. Having signed up once to this new service, people will receive regular alerts when a cheaper tariff becomes available to them, as well as getting a notification when their fixed deal is about to expire.
Peter Earl, Head of Energy, at comparethemarket.com, said:
“Our research shows that the price cap has done little to safeguard those people on a standard or variable rate tariff. The more affordable prices available on the market to those that shop around clearly show that the level of the price cap is a rip off. Too few people are switching suppliers, leaving millions of people paying too much for their energy.
“Even if the next price cap drops to the lowest level since it was first introduced, people should not see this as a good value price to pay for energy – rather, it is the absolute ceiling of what they should be paying. It is evident from our findings that understanding of the price cap is low. We would encourage anyone on a standard or variable tariff to review their current provider to see if they can find a better deal elsewhere.”
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