Martin Lewis explains what Ofgem price cap slash really means for you
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Martin Lewis has shared the most economical energy plans following the introduction of the Ofgem energy price limit.
Beginning in April, households will see a decrease of £238 in their annual energy bills due to Ofgem’s release of the energy price cap.
According to the financial expert, the top cost-saving options are E.on Next’s ‘Next pledge’ which is still 3% lower than the cap and British Gas’s price guarantee which could be as much as 12% lower than the cap.
According to the financial specialist, pre-payment used to be unfairly expensive, but now it will be approximately 3% less costly in order to match the fees for direct debit payments.
He stated on X that prepay, a popular option among vulnerable individuals, has always been a scam. Therefore, this sudden change is remarkable.
This is not a temporary trend, as the pricing model is expected to remain in place for the foreseeable future.
He advised users to consider switching from cap plans to prepay deals, as providers often give better deals to customers who pay by direct debit.
The upcoming price limit will decrease by 12.3% from £1,928 to £1,690 starting April 1 for a standard household with dual fuel in England, Scotland, and Wales.
Our live coverage of the Ofgem announcement has come to an end, but be sure to visit independent.co.uk for the most recent updates.
What are the plans of Labour and the Conservatives to assist households with their energy bills?
The cost of household energy is expected to decrease to the lowest level in the past two years. Ofgem has declared a 12.3% reduction in its price cap for this week.
Starting in April, the regulator will implement a new price limit that will result in a decrease in the average gas and electricity bill for households in England, Scotland, and Wales. The current bill of £1,928 will decrease to £1,690, resulting in a monthly savings of approximately £20 and an annual savings of £238.
Ofgem said the drop would see energy prices reach their lowest level since Russia’s invasion of Ukraine in February 2022, which caused a spike in an already turbulent wholesale energy market, driving up costs for suppliers and customers.
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Martin Lewis is correct: the decrease in energy prices is appreciated, but it may not be as beneficial as it appears.
A group of dissatisfied voters were recently interviewed by the BBC’s Newsnight show. They expressed mostly negative opinions about our current political leaders. When asked who they would prefer as prime minister, many mentioned “Martin Lewis”, a renowned financial expert and advocate for consumers.
It is unlikely that Lewis has any desire for a political career (as far as we know). Despite his unwavering and almost saintly integrity, taking on a political role may require him to make difficult compromises. It would be more beneficial to have him act as the primary watchdog, overseeing regulatory agencies like Ofgem, who have recently opted to decrease energy prices.
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How will Ofgem’s price cap affect my energy costs?
From April, the average household energy bill will decrease to its lowest point in two years, but it will still be significantly higher than before the pandemic.
What can families anticipate in the upcoming months, and will the era of extremely high energy bills come to a close?
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Octopus energy comment on Ofgem’s price cap
Rachel Fletcher, the Director of Economics and Regulation for Octopus Energy, provides her thoughts:
“It’s good to see Ofgem extend the ban on teaser tariffs, but it needs to end them once and for all. A permanent ban would force suppliers to compete by innovating and driving lower costs – rather than lazily relying on ‘tease and squeeze’ tactics, designed to lure customers in on temporary cut-price deals.
“Enforcing a permanent ban on deceptive tariffs will prevent a reemergence of the chaotic energy market that exploited customers and resulted in billions of dollars being spent to bail out failed suppliers.”
What is the reason for the decrease in Ofgem’s price cap?
The decrease is a result of declines in wholesale energy costs – the price energy companies pay for gas and electricity prior to distributing it to consumers.
The most recent price cap will result in the lowest prices since Russia’s invasion of Ukraine in February 2022. This event caused a surge in the already unstable wholesale energy market, leading to increased expenses for suppliers and ultimately consumers.
The instability of the market caused the cap to soar to an astonishing £4,279 in January of last year. However, the Energy Price Guarantee implemented by the Government helped to mitigate this impact by capping the average bill at £2,500 for customers.
According to Cornwall Insight analysts, the decreased limit indicates that the UK has successfully navigated the challenges arising from tensions in the Red Sea, ensuring a consistent source of LNG (liquefied natural gas) from the Atlantic.
The decrease in prices is partly attributed to the mild weather and the high supply in Europe and Asia.
What impact will Ofgem’s price cap have on my energy expenses?
The average cost of household energy will decrease to its lowest point in two years starting in April, but it will still be significantly higher than before the pandemic.
What can families anticipate in the upcoming months, and is the era of excessively high energy bills coming to a close?
Please refer to the complete article for more details.
The prime minister has expressed their opinion on energy bills.
According to Rishi Sunak, the general public believes that the economy has made a positive shift and that things are improving.
At the Welsh Conservative conference in Llandudno on Friday, the Prime Minister answered questions following his speech. He stated that there is a noticeable feeling among the public that the economy has improved since the start of the year, despite any negative comments made by Keir Starmer.
“They are able to observe the emergence of positive signs and improvements.”
The rate of inflation has been cut in half, mortgage rates are beginning to decrease, and wages have been steadily increasing for six to seven consecutive months.
Today, we observed a decrease in energy bills. According to recent surveys, consumer and business confidence has also increased, with the highest levels seen in years. This is a positive sign for businesses like yours, indicating a more optimistic outlook for the future.
Therefore, it is crucial that we adhere to our plan.
What are the proposed measures from both Labour and Conservatives to assist households with their energy bills?
The cost of household energy will decrease to the lowest level in two years as Ofgem has declared a 12.3% reduction in its price limit.
The new price limit set by the regulator will take effect in April and result in a decrease of the average gas and electricity bill for households in England, Scotland, and Wales from the current £1,928 to £1,690. This equals a monthly reduction of around £20 or £238 per year.
According to Ofgem, the decrease in energy prices will bring them to their lowest point since Russia’s invasion of Ukraine in February 2022. This event caused a surge in the already volatile wholesale energy market, resulting in higher expenses for both suppliers and customers.
Please refer to the complete article for more details…
Does the cap set a limit for energy bills?
The cap does not determine the highest amount a household will spend on their energy, but instead restricts the maximum price that providers can charge for each unit of power.
The total cost will be determined by the actual amount of electricity used in your household, as well as the type of meter and payment method.
Furthermore, Ofgem plans to revise its yearly standard consumption definition for upcoming pricing, in order to accommodate individuals who consume less energy.
PA reported that Ofgem stated E.On and Tru Energy had fulfilled its rigorous requirements.
Source: independent.co.uk
