Your guide to the Ofgem energy price cap: Will you be affected?

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In the last six months we have unfortunately seen a hike in energy prices due to wholesale market volatility. Today Ofgem announced an increase of the new price cap by £693 a year on energy bills, a rise of 54%. This is for the period of 1 April 2022 to October 2022.

Some of you may be a bit concerned about what is happening, and how it may affect you. This is why our Energy Specialists have put together this simple guide to help ease the stress and direct you to places where you can find support.


What is the Ofgem energy price cap?

In 2019 Ofgem (1) established a price cap to regulate energy prices on default and variable tariffs. The idea was to make sure you pay a fairer price for your energy, and links to how much suppliers can charge you per unit of gas or electricity, based on the underlying costs to supply you energy.

This cap is reviewed every six months, with the cap level set for both winter and summer energy prices. It is what a utility company can charge an average customer in the UK per year for the amount of electricity and gas they use.

On Thursday 3 February, Ofgem announced (2) that energy bills for the average customer on a default tariff is set to rise from £1,277 to £1,971 a year.

Prepayment customers will see an increase of £708 to £2,017.

The cost of buying gas and electricity in the global markets for suppliers like us has increased significantly since this time last year. This strain has unfortunately resulted in the collapse of 30 energy suppliers (3) who between them were responsible for more than two million homes.

Why are energy prices going up?

The cost of energy prices are higher due to many different factors.

  • 39% of The United Kingdom power still comes from burning gas.(4)
  • Last winter was particularly cold in Europe, this drove up demand and used up stored gas supplies.
  • There was also increased demand in China, as well as other parts of Asia, while Russian pipeline gas supplies were lower than expected.
  • There were significant gas and nuclear outages in the UK, and too few UK wind turbines to generate power. Low wind levels have led to more gas, and even coal, being used for power production, pushing already rising wholesale gas and electricity costs to record levels.


Is the Ofgem energy price cap going to affect me?

The energy price cap will only apply to you if you're on our variable tariff, which means you could end up paying more for your energy. You can check which tariff you're on in your online account.

However this is not applicable to you if you're on our fixed or fixed rate tariffs, but will affect you when your contract ends.

You can read more about how standard variable and fixed rate tariffs work in our blog.

Where can I find support?

The government has announced several support measures to help households with rising energy bills.

These include:

  • £200 off energy bills for domestic electricity customers across England, Wales and Scotland this Autumn. This will be paid back automatically over the next five years.

The government has called this the Energy Bill Discount Scheme.

How will the Energy Bill Discount Scheme work?

The government will provide funding to all suppliers for them to pass on to their domestic energy customers this Autumn.

Customers will pay back the discount automatically in equal instalments over five years, starting from financial year 2023-24, when wholesale gas prices are expected to come down. This is expected to be reflected as an increase to standing charges on bills.

It is not confirmed how customers will receive the money. This could vary depending on how customers pay for their energy bills. The Department for Business, Energy and Industrial Strategy will set out more detail on this policy in the spring.

Currently, government sources say there will not be an option to opt out.

What other measures are there?

  • A £150 non-repayable Council Tax Rebate payment for all households that are liable for Council Tax in Bands A-D in England.
  • £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax Rebate. Further details to be announced.
  • The government is continuing with plans to expand eligibility for the Warm Home Discount and increase the rebate value to £150 each year (from £140). More detail will be published shortly in the government response to the consultation on this.

You can find more information in the Energy Bills Rebate updated factsheet updated 8 February, 2022.

We know that rising bills will be significant and many won't be able to afford their heating, which is why we’ve put together some helpful resources you can access from us and the government.

E.ON Next debt fund.

The E.ON Next debt fund has been created to help our customers who are experiencing financial hardship and are struggling.

There are two ways this fund can help and support you:

  • To help with paying your gas and electricity bills through grants.
  • To replace appliances such as a cooker, fridge, fridge-freezer or washing machine if yours is broken or in poor condition.

Find out if you’re eligible for the fund.

The Priority Services Register (PSR).

If you need extra help with managing your energy account, we can add you to our Priority Services Register. If you or someone in your household is elderly, disabled or chronically sick, or if you have a speech, visual or hearing impairment we offer a range of services that will help

The Affordable Warmth Scheme.

Affordable Warmth is a government-led eco scheme that helps people heat their homes in an energy-efficient way.

It allows people to spend less on their monthly bills and support being friendlier to the environment too.

If you're wondering how to get free or partly funded energy improvements don't worry, we've made it really simple to learn more about the Affordable Warmth Scheme.

The Green Homes Grant.

The Green Homes Grant is a £2 billion scheme, launched by the government to help homeowners pay for energy saving improvements for their homes. The grant helps by installing measures such as wall insulation, solar panels and air source heat pumps.

This is to improve the warmth of homes, cut energy bills and help the UK to be zero-carbon by 2050.

Find out if you are eligible for the Green Homes Grant.

Homes for Living.

Homes for Living is a scheme designed to support your mobility, wellbeing and independence, offering free and attractive home aids and equipment designed to give you more freedom in your home.

We've secured Government funding and we're working in partnership with Invisible Creations® and Newcastle University.

Find out if you are eligible for Homes for Living.

Debt-advice resources.

There are also external debt advice resources you can get through Citizens Advice and StepChange.

If you are also worried about how money can have an impact on your mental health. We advise you to talk to our charity partner Mind.

Talk to our Energy Specialists if you're having difficulty.

Our Energy Specialists are here to help if you're concerned about the impact of the price cap rise on your energy bills. If you're struggling to pay, please visit our help page to find out more about how we can support you.

You can reach out to our Energy Specialists for personal advice on Facebook and Twitter. You can also find more information over on our Price Cap Information page.



(1) https://www.ofgem.gov.uk/check-if-en...ap-affects-you
(2) https://www.ofgem.gov.uk/publication...se-ps693-april
(3) https://www.forbes.com/uk/advisor/en...pliers-update/
(4) https://www.gov.uk/government/statis...atistics-dukes