Energy price cap fall is not enough, consumer advocates say

The fall is good news for those on default deals and pre-payment meters but does not go far enough, consumer advocates say.

By Sharon Marris, business reporter,

Image: Consumer advocates say customers should switch deals for the best prices

The energy price cap will fall slightly this winter but consumer advocates say households are still not getting a good enough deal.
The price cap protects around 15 million households - 11 million on default and standard variable tariffs and four million on pre-payment meters.

The cap for the average consumer on default tariffs will fall at the beginning of October by £75 to £1,179 and for those on prepayment meters it will go down by £25 to £1,217.

Ofgem said that the per unit price would remain the same for gas (4p per kWh) and fall slightly from 19p to 18p per kWh for electricity.
The period covered extends until March.

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Regulator Ofgem said that the slight fall was due to lower wholesale energy costs.

Dermot Nolan, chief executive of Ofgem, said: "The price caps require suppliers to pass on any savings to customers when their cost to supply electricity and gas falls.
"This means the energy bills of around 15 million customers on default deals or pre-payment meters will fall this winter to reflect the reduction in cost of the wholesale energy.
"These customers can be confident that whatever happens, the price they pay for their energy reflects the costs of supplying it.
"Households can cut their bills further in time for winter, and we would encourage all customers to shop around to get themselves the best deal possible for their energy."

Image: The energy market is dominated by the Big Six suppliers SSE, British Gas, Npower, Eon, EDF and Scottish Power

But consumer advocates said the best advice for people was to switch energy suppliers when their current deal expires.
Stephen Murray, energy expert at MoneySuperMarket, said: "Despite the price cap level dropping by £75, it's still more than the original level of £1,137 and crucially, there are more than 100 cheaper tariffs available to consumers in the market today.
"That means someone switching today could secure a deal that delivers three times the saving the price cap offers, while protecting themselves from this rollercoaster of price fluctuations every six months. It's a no-brainer."

Image: Around 15 million households are covered by the price cap

Peter Earl, head of energy at comparethemarket.com, said the move had done little to make prices more competitive for those stuck on standard or variable tariffs.
He added: "The price cap is meant to protect these customers from disproportionate costs but is currently £228 more expensive than the top 20 fixed rate tariffs available on the market."
He urged the government to review the price cap, saying the policy "is not doing the job it was intended to do".
"Energy customers should not see today's fall in the cap as a blessing but as a wake-up call to check if they are getting a good deal."
Richard Neudegg, head of regulation at uSwitch.com, said those on prepayment meters, who are often struggling financially, were getting an especially poor deal.
He added: "This highlights that a blanket cap is not the best way to help those most in need, and that those people would benefit from more targeted protection.
"The only way for consumers to avoid the rollercoaster price changes we've seen with the SVT [standard variable tariff] cap is to take power into their own hands and shop around for a cheaper fixed deal."
Ofgem will review the level of the cap in February for the summer period, which begins in April.