Rising national energy costs have left many consumers worried about their energy bills. But while energy companies must raise their prices, Utility Warehouse’s (UW) unique model and sustainable approach allow the multi-award-winning home service provider to keep its customers’ tariff prices as low as possible.
Here’s everything you need to know about the Government’s energy price cap and how UW can offer variable energy prices up to 5% lower than this cap.
The Government’s energy price cap explained
The Government’s appointed regulator, Ofgem, regulates all energy companies in Great Britain. Its goal is to work with the Government, energy companies, and citizens to keep energy prices as fair as possible. One of the measures Ofgem uses to control energy prices is a price cap. The organisation introduced this cap to give customers a fairer deal for their energy and to prevent what it considered to be overcharging of customers on poor-value tariffs.
Ofgem raises or lowers the cap twice a year (in April and October) depending on:
- The cost of wholesale energy
- Network costs
- Policy costs
- Operating costs
- Prepaid meter costs.
Because of the increasing demand for gas, electricity, and petrol, Ofgem has announced that it will increase the price cap for the second time this year. This is the first time this has happened since Ofgem introduced the energy cap in 2019.
The new increase will started on October 1, 2021. While an increase in the energy cap isn’t always welcome, this rise will allow energy suppliers to continue delivering reliable energy to our homes.
What the energy price cap means for you
Every time Ofgem adjusts the energy cap, most energy companies realign the pricing of their tariffs to be at or just below the cap. Depending on the type of tariff you’re on, you may or may not be subject to pricing changes – for now, at least.
If you’re on a Variable tariff, your energy price will fluctuate with the market. For example, the latest energy cap increase was applied on October 1, 2021, which means your October or November bill will reflect this change.
If you’re on a fixed tariff, this energy cap increase won’t affect you right now. Because you’re locked into a particular price with your energy company, you won’t see a change to your bill until it’s time to renew your contract.
Based on Ofgem’s price cap change, if you’re on a Variable tariff paying by Direct Debit, your cap is increased by £139 (from £1,138 to £1,277 for typical consumption). If you have a prepayment meter, the cap increased by £153 (from £1,156 to £1,309 for typical consumption). If you’re on a Fixed tariff, you won’t see these changes until your contract comes to an end.
Not sure if the energy cap affects you? Check out Ofgem’s guide to see how your energy bill will change.
Why Ofgem is increasing the energy price cap
The price rise comes down to supply and demand. As the world emerges from COVID-19 lockdowns, there is more demand for transportation, goods, and other means of production. We need energy to keep the world moving, so prices are rising in line with growing demand.
Wholesale energy prices have risen 250% since January 2021. This means energy suppliers have been paying 50% more to supply energy without an increase in revenue. Ofgem has adjusted the price cap to allow suppliers to spread this cost increase across their customer bases.
How Utility Warehouse is responding to the price cap rise
Ofgem regulates all energy suppliers in the UK, so the price cap change affects almost every energy supplier’s variable tariffs. However, despite concerns about soaring energy prices, UW’s prices remain competitive thanks to the company’s:
- Pricing structure of its wholesale energy agreement. This protects the cost of the energy UW buys against market volatility.
- Broadband, mobile, and insurance services. These services generate multiple revenue streams so UW doesn’t solely rely on energy.
- 25-year history of stable, sustainable business. This puts UW in a strong position to offer great value multiservice bundles long-term.
As the UK’s only genuine multiservice provider, UW understands how important it is to provide reliable, affordable energy to homes across the UK. Although energy prices will increase across many providers, UW always has tariffs below the Ofgem price cap (this applies for as long as customers stay with the company).
How you can save money with Utility Warehouse
Although many providers price their services at the energy cap, you can save money by shopping around for the best deal. UW’s fixed tariff can offer a stable price so you can avoid unpredictable energy price rises.
What’s more, customers who take out all UW services receive 100% renewable electricity, and UW funds the planting of a tree in each of their names. Plus, all UW energy customers can upgrade to a free smart meter. Not only do smart meters save energy, but UW customers can forget about taking meter readings – their smart meter will automatically send readings to UW.
UW customers can also bundle mobile, broadband, energy, and insurance services into great value monthly deals. This way, customers don’t need to worry about balancing multiple home services. Instead, they can track all utilities in one place and leave UW to manage their services while they focus on the things that matter most.