Replace: March 2024
The UK’s vitality regulator, Ofgem has introduced a lower to the vitality worth cap that can come into impact for invoice payers from April 1, 2024.
Octopus are the one main provider pricing considerably under the cap.
What’s the vitality worth cap?
The value cap limits the quantity an vitality provider can cost for items of gasoline and electrical energy. It additionally impacts the standing cost which is the every day value per gas sort and is about by Ofgem.
The value cap is usually communicated as an annual determine based mostly on the ‘typical consumption’ of a dual-fuel family that pays for his or her vitality payments by direct debit. Clients’ precise invoice quantity will rely on how a lot vitality they use, so those that use extra, pays extra.
What did the announcement say?
On the first April the Ofgem worth cap will lower from £1,928 to £1,690.
Because of this the unit charge for gasoline and electrical energy that clients are charged on an ordinary variable tariff will probably be round 14% decrease for electrical energy and 19% decrease for gasoline. Standing fees have been elevated however Octopus will hold our clients standing fees under the value cap, in contrast to different giant suppliers.
If you happen to’re struggling to pay we’ve got a number of help on provide.
Why are standing fees growing?
Power corporations don’t select the standing cost prices, these are set by Ofgem and canopy the price of supplying vitality to your own home. You’ll find out a bit extra about standing fees right here.
At Octopus, we might want to see standing cost prices moved into unit charge in order that clients have extra management over their vitality invoice prices, it will require coverage reform which we’re preventing for.
What extra help is on provide?
If you happen to’re anxious about paying your payments proper now, head to our devoted help weblog or give us a name.
You’ll discover detailed details about our tariffs, background information on the vitality disaster, and a hyperlink to our Monetary Assist type, which directs you to other ways we can assist you in case you’re struggling to pay – together with a £30 million Monetary Hardship fund.
What are the Versatile Octopus costs from April 1, 2024?
Abstract of the adjustments
- Most clients on Versatile Octopus will see decreased unit charges and a rise to their standing cost, prepayment clients will see a lower to their standing fees.
- If you happen to’re already in debt in your account or your funds do not appear like they are going to cowl your utilization based mostly on our forecast, this might imply that our suggestion on your month-to-month cost goes up.
- Good to know: in case you’re not paying by Direct Debit, you might save an extra £80 on common by setting one up with us.
Your vitality costs rely on the place you reside, and the way you select to pay. Beneath, we have included a breakdown of all Versatile Octopus charges and fees by area and cost technique.
Versatile Octopus costs for patrons who pay by Direct Debit. You can even click on right here to obtain these costs in a PDF.
Why do costs range based mostly on location and cost technique?
It prices us extra to produce vitality to some areas relying on issues like proximity to turbines, value of sustaining native networks and extra.
The identical is true with totally different cost strategies – for instance, it prices suppliers extra to manage and handle accounts that do not pay by Direct Debit, so Ofgem elements that into their Worth Cap.
Managing your direct debit quantity
One of the best ways to grasp our urged cost quantity is to take a look at your Steadiness Forecast. We constructed this helpful instrument to indicate you precisely how a lot we anticipate you will spend on vitality over the subsequent 12 months based mostly in your tariff costs and typical vitality consumption (which we work out based mostly on years of your meter studying knowledge).
What if I believe Octopus’ cost suggestion is mistaken? You may change your individual cost on-line and through our app. If you’re already in debt and attempt to cut back your direct debit we suggest you give us a name and we can provide you a hand.
Need a fast reminder of why we set your funds to a clean quantity 12 months spherical? Watch our fast explainer video:
Continuously Requested Questions:
Does the vitality worth cap have an effect on me?
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If you happen to’re on a variable tariff, like our Versatile Octopus, the Ofgem Worth Cap protects the value you pay.
The value cap particularly applies to variable tariffs as a result of they aren’t fastened towards the volatility within the vitality markets. Completely different suppliers can refer to those tariffs in various methods; normal variable tariff (SVT), non-fixed, and many others. At Octopus our variable vitality tariff known as Versatile Octopus.
If you happen to’d like to substantiate which tariff you are on, and particulars like your present costs and contract dates, you may see them in your on-line account (scroll a little bit means down and take a look at the main points under your property handle).
You may learn extra in regards to the vitality worth cap and whether or not it impacts you on Ofgem’s web site.
How might I get vitality £80 cheaper by paying by Direct Debit?
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Our Versatile tariff can have barely totally different unit charges and standing fees based mostly in your cost technique. The £80 isn’t a flat low cost for Direct Debit clients (or a cost on non-Direct Debit clients) – it’s the everyday financial savings a mean residence might see over a 12 months on the cheaper Direct Debit dual-fuel charges.
If you happen to change the way you pay, our system will decide that up and alter your charges robotically, so in case you don’t have a Direct Debit proper now, it’s tremendous simple to entry the most cost effective costs. All that you must do is about up a Direct Debit on-line and we’ll do the remaining.
Why are tariffs typically cheaper if I pay by Direct Debit?
Not having a Direct Debit prices us much more in admin.
We do not suppose it is honest to make everybody cowl that further value, so we do provide a less expensive charge for individuals who select to pay by Direct Debit, which prices us much less to handle.
Is the £1,690 determine from Ofgem the utmost worth I’ll pay for vitality?
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No: this determine will not be absolutely the most a buyer might pay.
If you happen to’re affected by the value cap, the safety you obtain is relative to how a lot vitality you employ.
Ofgem calculates the value cap based mostly on the yearly utilization of a typical medium consumption residence (that is 2,700 kWh of electrical energy and 11,500 kWh gasoline per 12 months). It represents the utmost quantity Ofgem considers honest for vitality suppliers to cost clients on variable tariffs.
This determine is utilized by suppliers to use the value caps safety towards every buyer’s precise utilization. Put merely: in case you use extra – or much less – vitality than that typical residence, your individual yearly vitality prices on a tariff priced on the most charges could also be increased – or decrease – than that £1,690 determine from Ofgem.
What are the precise most unit charges and standing fees of the vitality worth cap?
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The value cap units a most charge for:
- Power items: the value suppliers can cost variable tariff clients per unit of gasoline and electrical energy you employ
- Each day standing fees: the value suppliers can cost per day for ongoing prices, like paying the businesses who handle distribution networks, working prices, and many others.
Ofgem have shared that on common – for patrons paying by direct debit – the unit charges will probably be:
Electrical:
- 24.50 p / kWh unit
- 60.10 p / day standing cost
Gasoline:
- 6.04 p / kWh unit
- 31.43 p / day standing cost
Necessary: these are averaged figures from throughout all areas within the UK. As sure prices range, e.g. what transmission community charges we pay in an space, the precise most unit charge varies relying on area. There are different elements too: totally different most charges for Financial system 7 tariffs (which have a day and an evening worth) and prepayment meters.
Extra info on different cost strategies will probably be added to this web page because it turns into accessible.
Why do excessive gasoline costs have an effect on a 100% renewable vitality tariff?
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Although inexperienced vitality is cheaper to generate, available on the market it is bought on the similar, increased worth of gasoline and different fossil fuels. That is right down to the way in which the market’s arrange. It is just like how homes are bought based mostly on the value of neighbouring houses, relatively than what it prices to construct.
It is primarily arrange this fashion as a result of the grid all the time needs to be balanced: the UK’s vitality wants (or ‘demand’) matched completely with an equal quantity of energy provide. The grid calls on all various kinds of energy, from gasoline to renewables, to assist with its essential balancing job.
It would not be fully honest to pay some vitality turbines much less for his or her energy once they’re fulfilling the identical necessary perform. Because of this the very best worth finally ends up setting the market worth. When gasoline costs are excessive, all electrical energy costs are too.
We’re pushing for a system by which increasingly more of the electrons are inexperienced ones – as a result of the extra inexperienced energy within the grid, the much less we have to depend on costly, soiled gasoline imports to satisfy our vitality wants in any respect.
I’m on a hard and fast tariff proper now, what occurs when it ends?
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If you happen to’re on a hard and fast tariff, the very first thing to know is that the value cap doesn’t have an effect on your present vitality contract.
We’ll all the time electronic mail you prematurely of your fastened tariff coming to an finish.
If you happen to’d like to substantiate your present costs and contract dates, you may see them in your on-line account (scroll a little bit means down and take a look at the main points under your property handle) or on any PDF vitality assertion. It’s normally on the second web page, close to the highest of the breakdown on your electrical energy and / or gasoline fees for the interval.
