Business Renewals

Residential Price Cap Increase

Blog news

The recent increase in the residential price cap seen in October increased prepayment and standard variable customers average bills from £1,138 to £1,277 (£139 or 12%) until the end of March 2022 when a further change will be made.  It is clear the the increases in October simply were not enough to protect a large number of smaller energy companies who have been forced to close their doors for good.

So what is the expected level of change in April 2022?

A recent study by Cornwall Insights shows that if wholesale prices do not fall from their current levels the increase will be in the region of £383 moving the cap to £1,660.  However, a more recent study shows that under the same conditions the increase could be as high as £475 putting the cap at £1,752.

With so many suppliers facing losses as winter approches and a significantly higher debt book than usual we would hedge that the latter figure is likely to be closer to reality when OFGEM makes it’s decision unless there is a faster than expected decision on Nord Stream 2.

Recommendation is to hold your nerve and stay where possible on standard variable rates until the end of Q1 when there should be a lot more liquidity and supply in the market.


Please follow and like us:

Leave a Reply