Earlier this year, the government introduced big changes to the energy sector. Working with the energy regulator, Ofgem, they launched a price cap on 1st January 2019 to limit what energy companies, like us, can ask for each unit of gas and electricity and for standing charges on variable and default tariffs.
We never want to leave you in the dark. So we’ve put together a handy summary of what the price cap means, how it could affect you and your bills going forward, and our way of making everyday life more rewarding.
What is the price cap and how does it work?
The price cap is the maximum unit cost and standing charge for energy on variable and default tariffs. Ofgem has set this limit at a price they deem is fairer. They’ve taken the relevant unit rate and standing charge and multiplied that by the average household’s energy consumption.
Currently, the default tariff price cap is £1,254.21 a year for customers with an average energy consumption paying by Direct Debit.
What does it mean for you and your bills going forward?
If you’re on a standard variable or default tariff, you automatically qualify – so you don’t have to arrange this separately. The price cap doesn’t apply to anyone on a fixed tariff.
Many people think the price cap allows them to use as much energy as they like without getting bigger bills. But this is not the case. The price cap only limits the amount you pay for each unit of energy and your standing charge. If you use more gas and electricity than the average household, your bills will be higher than the price cap Ofgem published this year. But if you use less, your bills will be lower than that cap level.
Is the price cap permanent?
With the price cap, you now know exactly what we’ll charge you for each unit of energy if you’re on any of our variable or default tariffs. While this is good news, Ofgem does have the power to change the price cap. They’ll review it twice a year to reflect changes in industry costs – including wholesale energy, networks and policy fees. So the cap level and the associated unit rates can go up or down.
Making everyday life more rewarding
We know that every household is different. That’s why we offer a range of energy tariffs, so you can choose one that works best for you and your home.
Whether you’re on a fixed or variable tariff, you can join Rewards – our loyalty programme. From discounts to giveaways and prize draws, you’ll enjoy lots of little extras, just for being with us. It’s our way of saying thank you.
To help you keep track of your bills, energy use and rewards in real time, we’ve redesigned our app. It’s called British Gas Smart and you can also use it to book one-off repairs and buy HomeCare cover.
Finally, we strongly believe in making a difference and supporting local communities. We offer apprenticeships to young people and retirees, work with schools and children, support women in STEM (science, technology, engineering and math fields) and lend a helping hand to those in need. And by partnering with Carers UK, we’re helping the 6.5 million unpaid carers across Britain to feel recognised, valued and supported.