The Energy Price Cap increase and the energy market crisis - are you affected?
*PLEASE BE AWARE THIS IS AN OLDER POST AND THERE MAY BE A MORE UP TO DATE POST, OR UPDATED INFORMATION AVAILABLE ON https://www.citizensadvice.org.uk/ *
It’s highly likely you’ve seen all sorts of talk about an ‘energy price cap’ increase and the domestic energy market crisis, and you’re probably starting to worry about your own energy bills. Here at Citizens Advice Wigan Borough, we understand this is creating huge worry and uncertainty, so we’re here to help you understand the key facts and how you may be affected.
Got a question?
Speak to our dedicated advice team by calling free on 0808 2787 801.
What is the energy price cap increase?
The price cap was initially introduced as a fair tariff for low-income and vulnerable people. From 01 October, Ofgem are raising the price by 12%, that is a £138 increase and the highest ever cap. Ofgem sets the price twice a year, every October and April.
However this year, the new limit coincides with the energy market crisis we are facing. Seven energy firms have gone out of business due to the rise in wholesale energy prices, and more are expected to go.
Will you be affected?
The price cap increase affects you if you have a standard variable tariff. This is often the tariff that you are automatically placed on by default when you’ve not chosen a tariff or your fixed-term tariff has ended.
If your energy supplier has recently gone bust due to the energy market crisis, then your new supplier will put you on a standard variable tariff, meaning you’ll be affected by the price cap increase. In normal circumstances, this tariff would be the most expensive and we would recommend shopping around for a better deal. However, due to the energy market crisis, this standard tariff you will be placed on will likely be your cheapest option right now.
What should you do if your energy supplier has gone bust?
Don’t worry, your gas and electricity won’t be shut off if your supplier has gone bust. Ofgem will move you to a new supplier and you can check who is taking you over here.
Your new supplier will contact you and this can take around two weeks, so in the meantime you should take meter readings and keep any old bills you have in case you need to prove your payment history, credit balance or debt. You should also make a note of your account balance which you can find on your most recent statement.
Don’t try to switch suppliers or cancel your direct debit straight away, payments will go to the right company and you should wait until your new account is set up. You might find it harder to get any money owed if you switch before this happens. Once your account has been moved you are free to change tariff or supplier as you wish.
If your account is in credit, then your money is protected and your new supplier will tell you how you’ll be paid back. If you have any debts, the new company can take over and set up an in-house payment program, or it could go to an administrator, but they can be more aggressive in claiming the money back - you can contact us to get support if this is your situation.
If you get the Warm Home Discount, your new supplier will tell you if you can still get it. If you can’t get the Warm Home Discount with your new supplier, you can switch to a different supplier. Use our price comparison tool to check which suppliers offer the Warm Home Discount.
If you were on your old supplier’s priority services register, ask your new supplier if you’re still on it or ask to be added to it if this has not happened automatically.
If you have a prepayment meter, there is a small chance that you may not be able to top up straight away. You should get in contact with your old supplier via their out of hours number who should be able to get you credit, or change you to a credit meter or give you access to topping up.
If you need help or advice about an energy issue, get in touch with our team today - call us free on 0808 2787 801, or complete the contact form on our website.
