Households should fix energy prices now, after draft legislation for the Government’s energy price cap was revealed, which experts say will lead to price hikes for many customers.
The Department for Business, Energy and Industrial Strategy published details of the cap this morning, saying it will be a “temporary measure” until 2020.
The initiative, which promises to protect 5 million families from rip-off tariffs, will be kept under review and on the advice of Ofgem, the regulator, could be extended until the end of 2023 at the latest.
The price cap is not expected to come into force until the end of next winter and we still don’t know what level prices will be capped at.
Mark Todd, founder of energyhelpline, the energy switching site, suggested it could be as much as £1,160 for your total energy bill a year. In a best case scenario the cap could still be £1,066, he said.
The cap has been heavily criticised by energy experts who say that while it will reduce the cost of the most expensive tariffs it could actually raise the bills of households on the cheaper deals.
We saw evidence of this in May when the average cost of the Big Six energy firms’ cheapest tariffs increased by almost 20pc – compared to their standard tariffs that have gone up by 7.2pc – seven months after the price cap was first suggested.