Ofgem has announced its new price cap level

  • DebF_EONNext's Avatar
    Community Team

    EDIT: For more up to date information on this subject, please visit our new thread for the
    Energy Price Guarantee 👈 (just click right here)

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    Ofgem has announced the new price cap and we understand that this will affect many of our customers so we wanted to provide you with as much information as possible.

    What is the price cap?

    The price cap was introduced by the government in 2019 as backstop protection for customers who are on an energy tariff with standard variable rates.

    Electricity and gas prices are set to be updated every quarter from October by energy regulator Ofgem to reflect changes in industry costs.

    Today Ofgem announced that the price cap level for customers on a standard variable tariff will increase to £3,549 if you pay by Direct Debit and to £3,764 if you pay any other way for the average customer in England, Wales and Scotland.

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

    • £400 off energy bills for domestic electricity customers across England, Wales and Scotland this Autumn. This will not need to be paid back.

    The government has called this the Energy Bills Support Scheme.

    How will the Energy Bills Support Scheme work?

    In May 2022 the government announced several support measures to help households with rising energy bills. The main measure, announced by the Chancellor, is £400 off electricity bills for domestic customers across England, Wales and Scotland. This is known as the Energy Bills Support Scheme (EBSS) this money will start to be credited to customers accounts from 1 October 2022. This money does not need to be paid back. You can find out more on this thread: £400 Energy Bills Support

    Each energy supplier has been asked to pay customers who have an electricity supply, so this means if your electricity is with us, you'll get your payment from E.ON Next. If you only have your gas with us, then you'll get your rebate through your electricity supplier.

    You'll see a discount of £66 applied to your energy bills in October and November, and £67 a month from December to March 2023.
    We'll be paying the money differently, depending on how you pay for your fuel now:

    • Fixed Direct Debit customers will receive the money automatically as a deduction to their monthly Direct Debit.
    • Pay on receipt of bill customers and regular cash payment customers will see the money automatically applied as a credit to their energy accounts in the first week of each month. This will show as a credit in the payments section of their monthly bill.
    • Smart prepayment customers will see the money credited directly to their meters as a top up in the first week of each month.
    • Traditional prepayment customers will be provided with vouchers in the first week of each month. You'll need to redeem these at your usual top-up point in a similar way to the Warm Home Discount.

    The government has published more information about the Energy Bills Support Scheme on their website.

    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.
    • A £650 payment will be made to more than eight million low-income households who receive Universal Credit, tax credits, pension credit and other means-tested benefits. The first payment of £326 will start appearing in people's bank accounts from 14 July. To be eligible for the first installment, people must have started a successful benefits claim by 25 May.
    • £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.

    Why are energy prices rising?

    Like all energy suppliers, we buy energy from the wholesale energy market to then distribute to you, our customers. Even renewable energy needs to be bought in this way.
    The cost of energy in the market has increased significantly in recent times to an unprecedented high. Since this cost makes up a large proportion of your bill, we need to increase the prices on our price plans too.

    Am I affected by the price cap?

    The price cap applies to you if you're on a standard variable tariff. Our standard variable tariffs are called Next Flex and E.ON EnergyPlan. We'll contact customers on these tariffs to let them know what this means for them.
    If you were previously with another supplier and were migrated over to E.ON Next, and you have not chosen a fixed tariff, you may be on our standard variable tariff.
    The new cap level does not apply to you right now if you are on a fixed-term tariff. If you're on a fixed-term energy tariff, your prices will stay the same until your tariff-term ends. We’ll contact you when your fixed-term tariff is about to end with guidance for what to do.
    You can check which tariff you're on by logging in to your account and visiting your dashboard.

    Should I switch to another tariff?

    Any changes to our prices will be reflected in your dashboard in the coming weeks. Remember that any changes to your prices will not happen until 1 October. This is when relevant changes to your tariff will be made and you'll start to pay any new prices as a result. So, you still have time to think about next steps.
    If you're on a standard variable tariff, we’ll send you an email or letter to let you know how the changes affect you. You should receive this in the coming weeks.
    You may have seen or heard conflicting advice in the media, with experts advising that switching from a variable to fixed tariff could work out cheaper in the long run, or suggesting that it is better to stick with your current tariff. The reality is that it depends on what’s right for you.
    Our fixed deals can offer security as you know you’ll be paying the same price for a set period of time.

    It’s good to know that other factors will also impact how much your energy bills cost including:

    • How you pay.
    • The type of energy meter you use.
    • Your energy usage.

    Paying by Direct Debit will give you lower prices than other payment methods. If you pay for your energy as you use it, topping up with a key/card or using a Pay As You Go meter, we only offer one tariff for these payment types.

    What support is available for E.ON Next customers?

    This is a worrying time for everyone as the cost of energy continues to go up. We understand that you may be struggling to pay and have a number of resources to help. You can find out more about the support available on our Help with Energy Bills thread.

    How can I get help from you with making this decision?

    We recommend checking your tariff online at the end of the month once any new prices have been set and waiting to contact us until then.
    You can speak to our energy specialists, you will find all of our contact information on our Contact Us thread.

    Last edited by Beki; 16-09-22 at 18:56.
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  • 12 Replies

  • CharlesLovesSolar's Avatar
    Level 1
    Okay, so what is the new Next Flex electricity and gas Kwh price?

  • meldrewreborn's Avatar
    Level 91

    I worked out the likely rates and posted them here yesterday morning:-

    Current Eon Next customer, ex EDF, Zog and Symbio. Don't think dual fuel saves money and don't like smart meters. Chronologically Gifted. If I offend let me know by private message, but I’ll continue to express my opinions nonetheless.
  • DebF_EONNext's Avatar
    Community Team
    At the moment @CharlesLovesSolar we don't have this information as this was only announced on Friday however if you are already on the Next Flex we will be in touch either by email or letter (depending on your communication settings) with your new rates before they come in to place. If you are on a fixed tariff that is due to end soon you will be sent a quote for renewal, however we will have more information on the new rates a little closer to the time.
    @meldrewreborn that is a very helpful informative thread thanks for taking the time to gather the info 😊
  • CharlesLovesSolar's Avatar
    Level 1
    Quality post! Thanks - just what I was looking for, and pretty much what I feared. The Gas v Electricity price comparison is always interesting to me: fossil fuels are regrettably cost effective.
  • meldrewreborn's Avatar
    Level 91

    Thank you for your comment. I think with all this that the devil is in the detail and we need detailed facts (when they are available) to consider options properly.
  • meldrewreborn's Avatar
    Level 91

    How long is a piece of string? Thank you for asking though! if you post your region and the unit rates of the fixed offers and the duration I can offer a considered view - but fix price deals change often nowadays.
  • Welland99's Avatar
    Level 1
    The headline on the Eon website about the price cap is wrong and very misleading, isn't it?
    Your website and this article here both say:
    "Today Ofgem announced that the price cap level for customers on a standard variable tariff will increase to £3,549 if you pay by Direct Debit and to £3,764 if you pay any other way for the average customer in England, Wales and Scotland."

    The truth is that the cap is a cap on unit rates and standing charges. If customers use sufficient energy, their bills will be higher than the sums you quoted "for the average customer".

    Why do you not make a prominent headline about the capped rates? This would allow customers to easily work out their likely bills? A great many customers use much less energy than average customers and your misleading headlines do ABSOLUTELY NOTHING to reassure them. In fact, it probably fuels their anxiety about how high their bills could be.
  • Vince's Avatar
    Level 1
    @DebF_EONNext I switched to the v14 fixed contract in June as it seemed reasonable, given the available information at the time. So like many on a fixed deal I have been knowingly paying over the odds for the last few months. My question is Based on the Government announcements today of a 2 year reduced price cap. Can anyone advise, seeing there are no exit fees to pay here...

    Is there is any point staying on my fixed deal beyond today? Every extra day I'm paying more than the SVR.