Let’s face it, energy bills are boring, confusing and can be downright expensive. We’ve all been through the hassle of trying to split it three ways with our housemates, feeling all efficient and organised, only to get a big bill just in time for Christmas telling us we owe even more money. If only we had the cash to pay someone to sort this mess out for us. Oh wait, we spent it all on those pesky bills…
However, today’s news may be music to ears of young people across the UK, as the government has introduced a new pricing bill that could mean the end of complicated, overpriced energy charges. The Draft Domestic Gas and Electricity (Tarrifs Cap) Bill will hand power over to energy regulator Ofgem, allowing them to cap prices for certain tariffs at an upper limit. At last.
If you’re on a Standard Variable Tariff (also known as a SVT) — meaning your energy bill goes up and down depending on how much energy you actually use — you’ll benefit from the proposed legislation, meaning your bills won’t ever go over a certain upper amount. Usually the cheapest and more flexible option on the market, SVTs appear initially attractive to students and young renters alike, but often cause a sting in the winter months when you’re using the heating and your lights more.
However, if you’re already on a prepayment gas or electricity meter you won’t benefit from the proposed new changes, as cap for this type of energy plan is already in place.
There’s no solid answer as to when the new rules might come into force, but according to BBC News, it’s unlikely to kick in before this winter. However, it does note that the cap will last until 2020, possibly extending to 2023 “if Ofgem decides it is necessary”.
With customers of the ‘big six’ energy suppliers — British Gas, EDF Energy, npower, E.ON UK, Scottish Power and SSE — currently overpaying by £1.4bn per year, according to Business and Energy Secretary Greg Clark, the new laws aren’t just needed, they’re well and truly deserved.