James O'Brien 10am - 1pm
Millions of homes to see cheaper energy as Ofgem slashes price cap
7 February 2020, 07:43
Ofgem will slash its energy price cap by £17 as lower costs drive prices lower, the regulator confirmed today.
Ofgem has surprised onlookers by slashing its energy price cap by less than what many experts were predicting.
The regulator introduced the price cap on 1 January 2019 to help protect households who were on expensive default standard variable, tariffs which cost families hundreds of pounds more every year
The regulator announced that bills for around 15 million customers will fall by £17 per year on average use to £1,162. Customers on pre-payment meters will see their bills fall by the same amount to £1,200.
It comes as the price of wholesale gas and electricity fell between August and January, reducing the cost of the raw materials by £38 to £408 on the average bill. Expects had been predicting that anywhere between £20 and £60 of these savings could be passed on to households in Ofgem's half-yearly review of the cap.
Jonathan Brearley, the newly installed chief executive of Ofgem, said: "Suppliers have been required to become more efficient and pass on savings to consumers. In its first year, the cap is estimated to have saved consumers £1 billion on average on their energy bills and switching rates have hit record levels.
"Today's announcement is further good news for the 15 million households covered by both price caps who will see their energy bills fall in April. Households can reduce their energy bills further by shopping around for a better deal."
More to follow