Ofgem has announced today that from October 2021 the price cap will rise 12%, principally as global economies recover from the COVID-19 crisis.
When wholesale prices fell sharply last year in the wake of the first lockdown, the level of the price cap fell by £84 in October to its lowest level yet for the current winter period.
Demand for energy has since recovered which has pushed wholesale prices back up to more normal levels.
From October, energy customers on default tariffs paying by direct debit will see an increase of £139 from £1,138 to £1,277.
Pre-payment customers will see costs rise by £153, from £1,156 to £,1309.
The price cap protects consumers who have not switched energy supplier by ensuring they pay a fair price for their electricity and gas.
Ofgem adjusts the level of the cap up or down twice a year to reflect the costs of supplying electricity and gas for suppliers.
Consumers who want to avoid the increase and save money should shop around ahead of the increase in the price cap in October 2021.
Jonathan Brearley, chief executive of Ofgem, said:
“We know how difficult this is going to be for many customers, but what we can’t do is ask companies to sell their energy for less than they buy it for.
“But there is a great deal of help and support that is available.”
Thomas Dittmer, Director of comparison tool Trufl, said:
“A rise in the price cap means now more than ever is a pivotal time to shop around and check for a better deal.
“I appreciate that most people do not want to be shopping around and switching energy provider every year, which is exactly why we created Trufl, a simplified service to help you save.
For more information on how you could save on your energy bills, visit www.trufl.com today.
Trufl hunts for the best energy deals so you do not have to. Trufl delivers not just low prices but genuinely good deals. Transparent, explained, informed, with no false promises. Trufl understands that switching always requires giving something up, and making complex assessments about value, and understands that this can be hard.
Established in 2020 and based in the North East of England, Trufl offers a wide range of comparison options bespoke to every UK consumer.