Conflicting data on effects of the price cap

A series of releases over the New Year period have revealed a mixed picture of energy prices for customers across the UK.

The Department for Business, Energy and Industrial Strategy (BEIS) claims “new data” to mark the first anniversary of the price cap shows that it has resulted in customers saving as much as £1 billion on their energy bills during the first year.

In response energy minister Kwasi Kwarteng said BEIS’ “bold action” to ensure all consumers pay a fair price for energy is “making a real difference” to the budgets of up to 11 million households. The department told Utility Week more research would follow in February. 

Yet BEIS’ analysis was taken from information put out by Ofgem in November 2018, ahead of the introduction of the first price cap two months later. The cap has since been revised twice.

Research published this week by Comparethemarket.com claims that energy bills have increased by more than £500 since 2015.

The website’s research, collected from their own customers, says energy costs have risen by £107 over the past year, with the average energy bill now at £1,813, up from £1,706 in 2018.

This, the comparison service says, comes after years of increases in the cost of energy, with an average cost of £1,289 in 2015.

Source: Comparethemarket.com 

Peter Earl, head of energy at Comparethemarket.com, said: “The price cap is arguably a hindrance, not a help, when it comes to energy customers switching provider.

“Consumers may wrongly believe that the cap is a good value price to pay for energy, when in fact the cheapest available tariff on the market is around £300 cheaper than a standard variable tariff.

“The price cap should be seen by consumers as the absolute ceiling of what they should be paying for energy.”