Ofgem confirms significant price cap drop

Ofgem has confirmed that the next energy price cap will fall by around 7% after the Government moved some policy costs into general taxation.

The change for period 1 April to 30 June amounts to a reduction of around £10 a month for the average household using both electricity and gas. 

The regulator said the new level marks a “significant reduction” and is more than £200 lower than a year ago.

“We’re also seeing encouraging signs of greater engagement and competition, with switching increasing by almost 20% year on year,” said Tim Jarvis, Director General, Markets, at Ofgem. 

“More households are choosing time of use tariffs that offer cheaper off peak rates, and suppliers are offering a wider range of products, including deals with savings at evenings or weekends.”

From 1 April, 75% of the costs of the Renewables Obligation will move away from household bills and funding of the Energy Company Obligation (ECO) will also end.