Price cap falls - but pay more !

RedImp_2

Looks like latest OFGEM price cap will fall by £1000.  But government support is dropping so overall effect is £500 increase

Max68

I guess the only thing to take from it, considering we can't do anything about it, is to be relieved that it's not hitting £4000/£6000 mark which was being touted only a few months ago.

Mstty

RedImp_2 said:

Looks like latest OFGEM price cap will fall by £1000.  But government support is dropping so overall effect is £500 increase

Not quite correct the current notional price cap announced today comes to £3280 so a rise of £780 notionally over today's prices.

At the moment the Government has only pledged to bring this down to £3000 so their contribution would be £280.

Alnat1

The extra £500 is an annual figure and the period it refers to is only 3 months. April, May and June are warmer months when most folks won't have the heating on, so energy use is low.

Will probably mean the costs for the 3 month period this year will be more than the same period last year but by less than £50 for most.

What_time_is_it

The prices will be more expensive between April and June, unless the government extends the price guarantee, in which case they will stay the same.
Almost everyone uses less energy in April-June than they do during the winter months.
The prices will then almost certainly fall from July. But again, people don't tend to use much between July and September so this won't have much of an impact.
The important figure is how much the price is over the coming winter. At the moment it looks like it will be lower than the current EPG. 
So over the next year it looks very possible that many people's energy bill's may well be LOWER than over the 12 month period April 22 - March 23.
The headline figures are very misleading.

What_time_is_it

the costs for the 3 month period this year will be more than the same period last year but by less than £50 for most.

This is a fair analysis. The price cap only lasts for 3 months, so report on the cost increase over the the 3 months only.

Scot_39

RedImp_2 said:

Looks like latest OFGEM price cap will fall by £1000.  But government support is dropping so overall effect is £500 increase

Looking at it annually is wrong. Unless it is in play all year round.

It currently isn't forecast to be for next 2 3m Ogem periods (July on)

And you also omitted the fact that most with a normal domestic electricity supply were also getting £400 EBSS.

So arguably the real EPG and EBSS combined cap recently at the notional Ofgem usage was actually £2100.

But then that's a horrible mix of fixed and unit rates - 6m EBSS and 6m now 12m EPG rate cap and now 3m Ofgem rate caps (forecast as low as £2200 in July) - which complicates and confuses people.

There is no real £2500 or £3000 - only SVT 10.3p and 34p unit rates and 6.x/31.8p discounts for others  and  ?? And ?? (awaiting new govt epg discount and rates website updates)

And ignores the distribution of the use of the nominal 2900/12000 kWh annual allowance - which for most of the uk - is mainly over winter months.

My worst day in Dec cold snap - used 6x the kWh of my summer low.  My winter months average maybe c4 times.  Dec wiped out my energy kWh - not cost - saving in milder Oct / Nov cf last year.

So the energy cap at the EPG £2500 rate already made a massive difference to annual saving cf market rates.

Raising it by £500 over summer - has a much lower impact.

If however, the Ofgem cap doesn't last at summer forecast levels into next winter, then that £500 could come back into play.

And remember not everyone across the UK (elderly or disabled) or by location (further North, the longer the nominal heating season as a rule ) can turn off heating in time for the price rise to kick in.

EssexHebridean

Yes - if use were evenly spread across a year then it would be a £125 increase for the mythical "typical user" ie 3 months = quarter of a year. £125 = quarter of £500. If fact though for the vast majority of folk most of their energy use happens during the winter months doesn't it - I'd guess ours is split somewhere around 65% used between November > mid April although I've never actually worked it out. On that basis the actual increase at this stage based on that figure, then if we were "typical" that £125 would actually be knocked down still further.

In our case, our use is a fair way  below the "typical" at around 4000kWh electricity and 400kWh gas - so in our case - and in the case of a whole heap of other households too, I'm betting - the "increase" in April should actually be more than offset if the expected decrease in July occurs. I wouldn't want to tell anyone to bank on it, but from a personal perspective I'm expecting that to be roughly the way things go... Let's hope Cornwall Insights are on the right track with their predictions. 

km1500

They could not make this more complicated if they tried.

So, I know I am currently paying 34p per unit for electricity and 10p for gas.

What will I pay after 1 April?

Qyburn

Could anyone post the best link to the actual published information?  Thanks,

MattMattMattUK

km1500 said:

They could not make this more complicated if they tried.

It is not complicated, the EPG typical household threshold is rising. 

km1500 said:

So, I know I am currently paying 34p per unit for electricity and 10p for gas.

What will I pay after 1 April?

No one knows yet for sure but my back of an envelope calculations come out below, based on no change in the standing charge and based on the averages across the country I get those below. 

Electricity

Per kWh £0.43

Standing Charge £0.46

Gas

Per kWh £0.13

Standing Charge £0.28