What is the energy price cap?
The price cap is the maximum amount that energy suppliers can charge for energy on their variable tariff. The price cap is set by the energy regulator – Ofgem. They make sure that we’re all following the rules and protect customers from being overcharged for their energy. The price cap is not a targeted amount, it's a limit on the unit price of energy so there is no cap on your bill charges.
How does the price cap affect you?
Increases or decreases in the price cap have an impact on how much energy suppliers can charge for their energy. If you’re a customer on our So Flex tariff or your fixed contract is due to end and you have chosen not to renew onto a fixed rate tariff, the price you pay for your energy will change in line with the price of wholesale energy. We’ll always let you know before there’s any change in what you’ll be paying. Our So Flex standard variable tariff will never be higher than the price cap set by Ofgem.
From the 1st of October 2022, the price cap will rise from £1,971 to £3,549 per year for the average household. That means an increase of £131 per month for the average customer. Your estimated direct debit amount will be tailored to your usage.
The price cap is reviewed every three months and is predicted to increase again in April 2023.
Should I fix my rates?
As your supplier, it’s not our place to tell you what you should do about your tariff, but we can tell you what your options are.
If you’re on our So Flex variable tariff we'd advise that you:
Stay on the variable tariff - this will mean that the price you pay for your energy will increase and decrease in line with the price of wholesale energy. We’ll always let you know before there's any change in what you’ll be paying. Variable tariffs never go higher than the price cap set by Ofgem.
If you’re on one of our fixed-rate tariffs we'd advise that you:
Roll onto a variable tariff - if you don’t renew or change supplier when your contract ends, you will be put on our So Flex variable tariff (this will happen automatically, so you won’t need to get in touch). As outlined above, the price you pay will move in line with the price of wholesale energy, and we’ll always let you know in advance about any increases. Variable tariffs never go higher than the price cap set by Ofgem.
What happens when the variable tariff changes?
We’ll get in touch with you by email or by letter to let you know any changes in what you will be paying and what your options are in the coming weeks. It’s up to you what you choose to do next with your energy.
Please be aware that in usual circumstances, our So Flex tariff rates are likely to be higher than the rates of your fixed contract. When you move onto our So Flex tariff, your monthly payments will need to be adjusted to reflect this increase and avoid going into debt. In the communication that we send you, we'll estimate and amend your monthly payment for you automatically so that you know what to expect the following month.
You can adjust your direct debit payments by logging into your online account here.
You can read all about why energy prices are increasing on our blog here.
We understand that any increase in the cost of energy is concerning for many. If you are concerned about paying for your energy:
The Government is providing:
£400 discount on bills this winter for domestic electricity. You can read more about this on the government website here.
A £150 non-repayable Council Tax Rebate payment for all households that are liable for Council Tax in Bands A-D in England.
If you need independent advice
Advice on the best thing to do will change with the situation, so here are some resources to help you decide.
Martin Lewis has a wealth of advice on his website and in his email newsletter.
Ofgem’s website has some great resources that cover more detail about the changing price cap.
The Government’s Money Helper website is also a useful resource.
For financial support you can reach out to StepchangeNational Debtline.
Last updated: Tue, 14 Feb, 2023 at 3:34 PMPrint this page
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