Ofgem hikes price cap to £4,279 but its “almost totally meaningless” says Martin Lewis
Energy regulator Ofgem has announced its quarterly update to the energy price cap for the period 1 January – 31 March 2023.
The price cap is set to rise to an annual level of £4,279 in January 2023, up by around 20%.
But the move is “almost totally meaningless” says Money Saving Expert Martin Lewis.
The energy price cap changes every three months and is rising due to the ongoing high price of wholesale energy.
The price cap level indicates how much consumers on their energy supplier’s basic tariff would pay if the EPG were not in place.
For the first three months of 2023, the energy price cap will increase to an annual level of £4,279 for an average dual fuel household paying by direct debit based on typical consumption, but bill-payers will still be protected by the Government’s Energy Price Guarantee until the end of March 2024, as confirmed by the Chancellor on Thursday 17 November.
There is no immediate action for consumers to take as a result of today’s announcement.
In a post on Facebook, Martin Lewis said:
“The January price cap is almost totally meaningless for consumers bills.”
Rocio Concha, Which? Director of Policy and Advocacy, said:
“The news that the energy price cap will hit £4,279 from January will be hugely worrying for consumers but they should remember that their bills are protected against this price increase by the government’s energy price guarantee scheme – which caps the amount that households can be charged to around £2,500 for the average household until April.
“The energy price guarantee will then rise to around £3,000 for the average household from April 2023 – April 2024. While there is additional support in place for those struggling most, this may still not be enough – particularly if bills remain this high next winter. The government must ensure that as energy prices remain incredibly high, consumers are not left struggling to make ends meet.
“Which? is also concerned that hundreds of thousands of customers on traditional prepayment meters have not yet claimed the government support that is available. Energy firms and the government must work to understand why so many Energy Bill Support Scheme vouchers have not yet been redeemed, and ensure that customers on these prepayment meters – who are more likely to be vulnerable and on lower incomes – are able to access this vital support.”
The next quarterly price cap update will be on 27 February 2023.
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