Energy Prices Are Increasing This October

Ofgem recently announced that it will increase the next energy Price Cap from £1,568 to £1,717. This means that from 1 October, electricity and gas customers' So Flex and So Flex Green variable tariff rates will change to reflect this. This equates to a 10% increase from the last price cap. We’ve prepared a short explainer on what this means for you.

What is the Energy Price Cap and how does it work?

The Energy Price Cap acts as protection for households with variable tariffs by setting the maximum amount they can be charged for units of energy. Ofgem implemented this measure to ensure that people on variable tariffs are not being overcharged. The Price Cap is a dynamic figure that is adjusted every 3 months based on the wholesale energy market. If you are on a variable tariff, your prices will change accordingly. However, if you are on a fixed tariff, your prices will remain unaffected for the duration of your contract.

It’s important to note that the Price Cap limits how much you are charged for your rates, not your overall energy usage. If you use more energy, you will be charged accordingly.

Why has the price cap increased?

Geo-political tensions and extreme weather events have once again contributed to volatility in the global energy market. Being that network costs are also linked to inflation, this has continued to rise over the last few years. Gas is currently the primary heating source for most British homes and generates over one-third of its electricity, thus any increase in wholesale gas prices has had a significant impact.

Ofgem has stated that we shouldn’t expect energy prices to return to pre-2022 levels and that volatile gas prices are likely to persist as a long-term issue. We understand this isn't the best news but we endeavour to be as transparent about these things, and also offer our support where possible.

Should I switch my tariff?

We always state that you have the freedom to choose which tariff works best for you. Given that this price cap increase will likely rise again in January, you might find it beneficial to opt for our fixed rate tariff by renewing inside your online account. Having a fixed tariff means you’ll lock in those unit rates and standing charges for the duration of your contract, regardless of how the price cap changes. We wrote a helpful blog that explains a fixed tariff, helping you to make an informed decision.

If you have any questions or concerns about the upcoming energy price change, please don't hesitate to contact us.