Ofgem energy price cap set to save UK households £1bn per year

We bring you some slightly different news today as we came across an article published by The Independent stating how energy watchdog 'Ofgem' will be introducing a price cap that can save UK Households £1bn per year. This is based on 11 million homes throughout the UK which can, on average, save up to £75 annually.

Such price cap will see households save on their electricity and gas bills helping us put a little extra away each year. Now the cap is set at £1,136 per year for a typical dual fuel customer which means current suppliers must match or lower the proposed amount.

Now those reading this who like are fond of the price cap can expect it to come into play by the end of 2018.

Here's what Ofgem's CEO had to say:

'Ofgem has made full use of the powers Parliament has given us to propose a tough price cap which will give a fairer deal to consumers on poor value default tariffs.'

'Once the price cap is in place, all households in Great Britain covered by the cap will be protected from being overcharged for their energy. Consumers can have confidence that falls in energy costs will be passed on to them and if costs increase, Ofgem will ensure that any rise will be due to genuine increases in energy costs rather than supplier profiteering.'

Mr Nolan added: 'Households protected by the cap will be able to save even more money by shopping around for a better deal. Meanwhile Ofgem will continue with reforms which aim to deliver a more competitive retail energy market which, combined with protection for those who need it, works for all consumers.'

Now others have had their say with some saying they agree with the price cap, while others state Ofgem are playing a dangerous game. Citizens advise, who help many members of the public with legal advice, said the cap is 'an important step in the right direction' but added, 'While the price cap should save people on standard variable tariffs money, people should still be able to find a better deal on their energy bills by shopping around'

Is it really a good idea?

Head of regulation over at Uswitch, also gave his opinion stating  Ofgem are playing a 'dangerous game' as the proposed £1,136 is still £300 more than the current cheapest deal on the market and that 'Customers are being sold a cap trap under the guise of a silver bullet. Rather than tackling the very real challenges faced by vulnerable households, this price cap condemns energy customers to more of the same - high bills, poor service and suppliers resting on their laurels.'

The head of regulation went on further to say that it remains critical that the cap doesn't undo progress that's been made to create a fully competitive energy market. But what's your opinion? We know for a fact many students on our Electrical, Plumbing and Gas Training Courses for example would love to voice their opinion on such topic. We definitely think it's worth doing if we can save some extra money, which in this day and age is very difficult to do knowing the times we live in.