Energy prices are falling this July

Ofgem recently announced that it will decrease the next energy Price Cap from £1,690 to £1,568. This means that from 1 July, electricity and gas customers' So Flex and So Flex Green variable tariff rates will change to reflect this. For an average household paying by direct debit for dual fuel, this equates to a decrease of £122 over a year. As always, we’re on hand to give a little explainer and what you should know.

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

The Energy Price Cap serves as a safeguard for households with variable tariffs, setting how much they pay for units of energy. It was implemented by Ofgem to ensure people on variable tariffs were not being overcharged. It’s a dynamic figure that changes every 3 months based on the wholesale energy market. If you’re on a variable tariff your prices will reflect this. Your prices won't be affected if you’re on a fixed tariff.

It’s worth mentioning again that the Price Cap is a cap on how much you are charged for your rates, not your overall usage. If you use more, you’ll be charged accordingly for that usage.

Why has the price cap gone down?

Despite lower Russian gas exports, Europe has been able to rely on gas storage sites being well stocked. This latest drop in prices has again been bolstered by the recent mild winter, meaning there was also less pressure on gas stockpiles. But with the recent price cap decreases, energy prices are still a long way off from where they were at the start of the decade.

Should I switch my tariff?

You have the choice to remain on our variable price tariff or sign up for a fixed tariff. Recently, MoneySupermarket suggested customers should consider fixing their tariff, with many predicting that energy prices could surge this winter. Opting for our newest fixed tariff, So Pineapple, means you can avoid any unpredictability over the next 12 months. For more information on the pros and cons of fixed rate tariffs and variable tariffs, check out our previous blog.

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