[DebF_EONNext]

Good morning E.ON Next Community 👋

You may have seen the news already that Ofgem have announced the latest price cap information. Here's everything you need to know about the Ofgem 1 April energy price cap 2024. Please keep in mind that although the announcement was made by Ofgem today, the new rates will be from 1st April 2024 to 30 June 2024, so these prices won't show on your bills just yet 🤓

What is the price cap?

The price cap sets the maximum price per unit an energy supplier can charge for your energy, the limit also applies to standing charges. The level of the cap is based on a typical household's annual usage however, you may pay more or less depending on your own energy consumption ⚡

The government introduced the price cap in 2019 to protect consumers from paying too much for their energy. It's set by the energy regulator Ofgem & it's reviewed four times a year.

The current price cap (1 January 2024 - 30 March 2024) sits at £1,928 however from 1 April 2024 it will change to £1,690.

How does this compare to the previous price cap?

As mentioned above the price cap (1 January 2024 - 30 March 2024) currently sits at £1,928 however from 1 April 2024 it will change to £1,690.

The good news is the price cap has fallen once again - if we compare this to the April price cap 2023 this is significant and will be welcome news for many 🙌 When we look at the comparison from the current price cap (1 Jan 2024), what this means is for the average household the annual cost of energy will decrease by around £238 per year (unless of course the account is in debt). Here's a breakdown:

Will I be affected by the price cap?

If you've got a fixed tariff with us, then it won't affect you (unless your tariff ends within the price cap period) however the price cap will change things for customers on Next Flex - our standard variable tariff and those of you on Next Pledge - our E.ON Next tracker tariff (Next Pledge prices are guaranteed to stay £50 below the price cap!).

Where can I find more information?

Ofgem announced the new price cap today (23 February 2024) however we will be keeping this thread updated if there are any changes. Alongside this thread, you can also check out our blog & website too for further updates.

🌟 What's happening in the energy market?
🌟 Energy prices are falling, should I fix my tariff?
🌟 What's happening with your bills?
🌟 What is the energy price cap?

Is there any other support available?

There's lots of support available and we want to help you stay on top of your energy bills. Check out A helping hand - Extra support with the cost of living 🤗 which outlines all the support we offer.

If you find you're struggling you can get in touch with one of our Energy Specialists who can support you. You can find all of our contact information by visiting this thread 👉 How to contact E.ON Next

[DebF_EONNext]

@Mailman @JoeSoap @meldrewreborn @retrotecchie @Tommysgirl @WizzyWigg @geoffers @wizzo227 does this announcement have any affect on you?

I was offered to fix with my supplier but I decided against it as it's more than the cap, I'm going to hold off and see if they offer a better fix closer to the time. Although I might consider switching supplier as I do like the look of the Next pledge 😅 I'm going to be hit again with the standing charges though!

[JoeSoap]

@DebF_EONNext

I’m thinking about switching tariff to my latest ‘special offer’

https://community.eonnext.com/threads/8226-Is-it-Time-to-move-to-a-Fixed-Tariff?p=47886&viewfull=1#post47886

I’m going to calculate what I’d save over the next three months to potentially offset the exit fees should I want to switch again.

Decisions, decisions 🤔

Edit... Decision made... I switched 🤯

[DebF_EONNext]

@JoeSoap it's definitely worth people doing a quick calculation to workout the best option as everyone's circumstances are different. Fingers crossed for a good deal for you and FloSoap!

[meldrewreborn]

Originally Posted by DebF_EONNext

@JoeSoap it's definitely worth people doing a quick calculation to workout the best option as everyone's circumstances are different. Fingers crossed for a good deal for you and FloSoap!

but is there a need to rush for a fixed price tariff now - I’m not convinced that there is but I will definitely end my current fix by April 1, I’m hoping for better choices in the weeks ahead - I might be wrong in that though!

[Mailman]

Originally Posted by meldrewreborn

but is there a need to rush for a fixed price tariff now - I’m not convinced that there is but I will definitely end my current fix by April 1, I’m hoping for better choices in the weeks ahead - I might be wrong in that though!

My very good Winter 25 fix runs out on 31st March as well. So for my circumstances I see no reason to ditch my current fix at all but will have to go onto something else commencing 1st April. Others, as we have seen, if they have more expensive fixes now and, if exit free, may be happier to fix right now. Those currently on Next Flex may be drawn into fixes now which will probably prove more expensive in the long term although fixes always give price certainty.

Whether we now see different fixed products being released by Eon Next in the run-up to April 1st remains to be seen although my feeling is yes we will - although not necessarily with an overall lowering of pricing.

[JoeSoap]

Originally Posted by DebF_EONNext

@JoeSoap it's definitely worth people doing a quick calculation to workout the best option as everyone's circumstances are different. Fingers crossed for a good deal for you and FloSoap!

In my mind it was wait another three months to see if the next predicted price drop materialises or switch right now to get the maximum saving compared to my current tariff before that next price cap announcement. I'm not at all convinced that I couldn't have done better if I had waited it out but I've got some certainty for two years at a price I'm happy with.

[JoeSoap]

Originally Posted by meldrewreborn

but is there a need to rush for a fixed price tariff now - I’m not convinced that there is but I will definitely end my current fix by April 1, I’m hoping for better choices in the weeks ahead - I might be wrong in that though!

Indeed, you might be wrong... but by the same token you might well be right. We all have to make decisions and in the case of fixing energy prices, particularly when considerable exit fees are involved, it can be quite a while before we know if we called it right. I was completely blindsided by those rapid price hikes a couple of years ago and I would hate that to happen again.

[retrotecchie]

@JoeSoap

Interesting to note, looking at the cost breakdowns, the £19 levy for network costs (SoLR) has been removed from the breakdown so that we are no longer paying for Supplier of Last Resort charges. That's good. No-one has gone bust in the last two and a half years, so SoLR should all be done and dusted now.

However, there is a new item added called EBIT (£40). Don't you just love clarity?!!

For those with no knowledge of accounting, the term EBIT stands for Earnings Before Interest and Taxes. From April onwards, the domestic energy companies are now allowed to make a small profit, which is only fair as for the last two or three years, they have been making significant losses. Sure, oil and gas producers have been raking it in, but not the domestic gas and electricity suppliers, who all have to buy their energy on the wholesale market.

A representative of the energy industry speaking on the BBC news last night said that in, recent years, domestic energy companies profit margins are around 1p in the £1 gross, if that. £40 as a proportion of £1690 works out at 2.23% gross. I don't think anyone can complain about that too much. I can't think of too many businesses with a net of much less than 4%.

[meldrewreborn]

I think EBIT has always been ther.

However the changes to the price cap this time are significant and can be viewed here.
Changes to energy price cap between 1 April to 30 June 2024 | Ofgem

Some of the statements attributed to allowances for bad debt might in fact relate to "ensuring suppliers have sufficient funds to support people who are struggling"