Ofgem has announced its new price cap level.

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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 updated every April and October by energy regulator Ofgem to reflect changes in industry costs. On Thursday 3rd of February 2022, Ofgem announced that the price cap level would increase by £693 for the average customer in England, Wales and Scotland. 

For prepayment customers the price cap level will rise by £708 for the average household.

We’re currently looking at what this means for our customers and will contact those who are affected.

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

These include:

  • £200 off energy bills for domestic electricity customers across England, Wales and Scotland this Autumn. This will be paid back automatically over the next five years. 

The government has called this the Energy Bill Discount Scheme. 

How will the Energy Bill Discount Scheme work?

The government will provide funding to all suppliers for them to pass on to their domestic energy customers this Autumn. 

Customers will pay back the discount automatically in equal instalments over five years, starting from financial year 2023-24, when wholesale gas prices are expected to come down. This is expected to be reflected as an increase to standing charges on bills. 

It is not confirmed how customers will receive the money. This could vary depending on how customers pay for their energy bills. The Department for Business, Energy and Industrial Strategy will set out more detail on this policy in the spring. 

Currently, government sources say there will not be an option to opt out. 

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.

  • £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.

You can find more information in the Energy Bills Rebate updated factsheet updated 8 February, 2022. 

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 April. 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. 

There are also lots of ways you can reduce your energy usage and therefore how much you pay. Check out these helpful tips for increasing your energy efficiency

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. 

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 get advice from our Energy Specialists on social media at Facebook, Twitter and WhatsApp. Our E.ON Next Community is also a great place to find support from other E.ON Next customers. 

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More of your price cap FAQs.

You’ll find more answers in our FAQs below which our Energy Specialists will be updating over the coming weeks to continue supporting our customers. You can also stay up to date by following us on Facebook, Twitter and Instagram