Business and Energy Secretary, Alok Sharma, said:
“The Energy Price Cap has been vital in ensuring customers do not pay too much on their bills, which is why we are keeping it in place for at least another year.
Switching energy supplier to find the best value deals is still the best way to save on bills, but this government is determined to make sure all customers are treated fairly and get the protection they deserve.”
It is estimated that since its introduction in January 2019, the Cap has saved customers around £1billion a year. For the typical household on an energy default tariff, this equates to between £75-£100 per year.
With the Competition and Market Authority’s Prepayment Meter Cap due to expire at the end of 2020, from January 2021, an additional 4 million households with prepayment meters on default tariffs are also set to be protected by the Cap.
Jonathan Brearley, Chief Executive of Ofgem, stated:
“The Secretary of State’s announcement means that 15 million households will continue to be protected under the price cap and will pay a fair price for their energy in 2021”.
“Although those protected by the cap are paying a fair price, they can also reduce their energy bills further by shopping around for a better deal”.
In the first 6 months of 2020, a total of 2.8 million electricity customers and 2.1 million gas customers switched supplier and as a result, benefitted from lower bills.