In August 2021, Ofgem announced the highest-ever rise in the Energy Price Cap, which is a limit set for what energy suppliers can charge customers on Standard Variable tariffs (SVT). The cap is usually reviewed twice a year and adjusted in October and April. During normal times, these Standard Variable tariffs are often the most expensive deals for customers. But these are not normal times.
A recent surge in wholesale energy prices have led to energy suppliers putting up their fixed-term tariffs, whose prices are not regulated in the same way by Ofgem.
The gas price rise is being blamed on depleted stocks after last year’s long winter, high demand and reduced supply from Russia. As for electricity, a key cable between the UK and France caught fire this September, reducing supply from overseas until it can be restored (likely by March 2022), and low wind speeds in the North Sea have further reduced electricity supplies.
These events have meant that tariffs affected by the Energy Price Cap may be more competitive than expected. It’s also meant that numerous small energy suppliers are unable to keep their businesses afloat when selling energy to customers for less than the purchase price. People’s Energy, Utility Point, PfP Energy and MoneyPlus Energy are just a few of the suppliers who have recently ceased trading. Many more are likely to fail by the end of the year.
Comparing energy tariffs to ensure you’re on the best deal is still possible but must be carefully considered given the current market volatility. The best deal for you today won’t necessarily be the same one a few months down the line, so review your options regularly.
If your supplier goes bust, Ofgem will appoint a new supplier to take over. Wait until the new supplier contacts you before considering switching tariffs. Your energy will not be cut off as a result of your supplier going out of business.
Whilst the situation around us unfolds, reduce your energy costs in other ways:
Contact our in-house energy experts for advice and practical support. We’re here to help.