Ofgem price cap

acekings

Hello all does the Ofgem price cap apply to only SVT? If so and your a high energy consumer on a fixed tarif for example doesn’t it make sense to roll off or move to a SVT to take advantage of the cap? Plesee advise

Sterlingtimes

It seems to be so badly reported that it is questionable what is being offered. Many newspapers give the impression that it is a "use as much as you want" tariff at a fixed price. It must cover a limited customer group otherwise millions would want to take advantage of the fixed price deal. Perhaps someone will explain.

wavelets

acekings wrote: »

Hello all does the Ofgem price cap apply to only SVT? If so and your a high energy consumer on a fixed tarif for example doesn’t it make sense to roll off or move to a SVT to take advantage of the cap? Plesee advise

In answer to your first question, yes the price cap only applies to the supplier's standard variable tariff
(and suppliers such as BG are now phasing out their standard variable tariff )

In answer to your second question, that obviously depends on the price you are currently fixed at.
Use a comparison site to find the best deal for you; they include suppliers standard variable tariffs.

Stephen Murray, energy expert at MoneySuperMarket [the owner of this site], warned consumers not to be complacent about saving money on energy.
...
"There are more than 100 tariffs available right now which are cheaper than the proposed level of the price cap at £1,136. That means switching today could save you £250 or more, and there's no need to wait for a price cap that would actually save you on average £75."

https://www.bbc.co.uk/news/business-45422218

acekings

Yes it does seem confusing and has left me confused as I have multiple rental property energy accounts and I switch a lot and for example even on the cheapest fixed tariffs my bills for some properties come to £1800 a year. So if this cap only applies to SVT then it makes sense to roll off on to a SVT or switch now.

However if energy companies scrap SVT tarrifs then perhaps this will end up as just a gimmick.

If Ofgem’s redress/compensation model is anything to go on I don’t hold out much hope!

beardiedog

This is for those on an SVT with "typical useage" which I understand to mean that you should pay no more than £1136 pa if you are a typical useage user, whatever that is defined as.

If you use more you pay more and vice versa.

acekings

Sterlingtimes wrote: »

It seems to be so badly reported that it is questionable what is being offered. Many newspapers give the impression that it is a "use as much as you want" tariff at a fixed price. It must cover a limited customer group otherwise millions would want to take advantage of the fixed price deal. Perhaps someone will explain.

I can only see it as worthwhile for high energy consumers to switch to svt as I get a feeling energy providers will soon stop people from moving onto this from the outset and will most likely force people to take more expensive fixed tarrifs

wavelets

acekings wrote: »

Yes it does seem confusing and has left me confused as I have multiple rental property energy accounts and I switch a lot and for example even on the cheapest fixed tariffs my bills for some properties come to £1800 a year. So if this cap only applies to SVT then it makes sense to roll off on to a SVT or switch now.

However if energy companies scrap SVT tarrifs then perhaps this will end up as just a gimmick.

If Ofgem’s redress/compensation model is anything to go on I don’t hold out much hope!

Why are you switching so often, and why to such high prices??? :huh:

Have you considered setting up a Cheap Energy Club account for each of your properties and then you will be notified as and when any cheaper deals become available to you?
https://www.moneysavingexpert.com/cheapenergyclub

Why are you paying for the utilities at your rental properties? Most landlords expect the tenants to be responsible for the utilities.
Perhaps you are running HMOs where it may be impractical to expect the multiple tenants to pay the supplier? In which case, as a landlord, you should probably be on a commercial tariff ... and hence all the discussion of price caps, comparison sites, the MSE Cheap Energy Club, etc are meaningless as they do not cover commercial tariffs.

Even then, tenants are often expected to repay the landlord the cost of the utilities they use.

If you find this all very confusing, get a professional to manage your portfolio.

acekings

Hello, I have Hmo properties that have 5-6 tenants living at them and usually prefer cheaper 1 year tariffs and then search for cheaper deals. However the high energy usage means that there’s no way around bringing down the cost by a huge amount as that’s just what the tenants are using as effectively it’s 5-6 households in 1 property


This energy account you say, does it have more and cheaper deals compared to uswitch and the energyhelpline?

sm9ai

acekings wrote: »

Yes it does seem confusing and has left me confused as I have multiple rental property energy accounts and I switch a lot and for example even on the cheapest fixed tariffs my bills for some properties come to £1800 a year. So if this cap only applies to SVT then it makes sense to roll off on to a SVT or switch now.

This is a very badly reported story.
Imagine all of those giant manor houses being heated up all year for £1,136. That would be grossly unfair. (Although we do have a Tory government...)

You still pay per usage, the cap is on the unit rate, not the annual bill. So as you switch regularly, you won't see any benefit to this.
(In fact, you will probably find your tariffs will increase to cover the savings offered to those who don't switch ).

The biggest savings you could get, if you don't already use it, would be to fit landlord smart Thermostat to properties e.g. https://www.inspirehomeautomation.co.uk/landlords.php

And/Or look at commercial tariffs(but be careful, you won't have the standard consumer rights) for your properties, someone like https://www.fullpowerutilities.com/ should be able to help.

The_Green_Hornet

https://www.ofgem.gov.uk/publications-and-updates/ofgem-proposes-price-cap-give-11-million-customers-fairer-deal-their-energy

https://www.ofgem.gov.uk/publications-and-updates/default-tariff-cap-overview-document

molerat

The price cap simply means that those on the expensive standard tariffs and using the average amount of energy as defined by OFGEM - https://www.ofgem.gov.uk/gas/retail-market/monitoring-data-and-statistics/typical-domestic-consumption-values - will save around £75 per year. If that average user changed to a fixed tariff they will likely save another £200 per year. The downside to this is that the energy suppliers will still want their pound of flesh so all the rest of us that do switch will see an increase to cover the loss, the majority will pay more to cover the few that are not switching.