October 2023
This web page refers back to the value cap from July 2023. Discover out extra about vitality costs from October 2023 and what they imply for you.
What’s the vitality value cap?
The value cap limits the quantity an vitality provider can cost for models of gasoline and electrical energy.
It’s 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. Prospects’ precise invoice quantity will rely upon how a lot vitality they use, so those that use extra, pays extra.
What did the announcement say?
The value cap will fall from £2,500 to £2,074.
Which means the unit fee for gasoline and electrical energy that prospects are charged on a typical variable tariff will likely be decrease. The standing prices will stay the identical/ fluctuate by space.
You will need to be aware that this drop within the value cap will come into impact similtaneously the tip of the Power Value Assure.
That is the subsidy that the federal government has been offering UK vitality invoice payers since October 2022 (With out the Power Value Assure, a typical annual invoice could be £3,280 below the Ofgem Power Value Cap).
This may imply that the advantage of this discount to the value cap will not be felt because the charges and payments are more likely to be much like these obtained prior to now yr.
Does the value cap have an effect on me?
For those who’re on a variable tariff, like Versatile Octopus, the Ofgem Value Cap protects the value you pay. The value cap particularly applies to variable tariffs and never fastened tariffs.
What extra assist is on provide?
From the federal government:
Full data could be discovered right here however we’ve included a prime line abstract beneath.
At the moment, individuals receiving means-tested advantages will obtain a fee of £900, pensioners will obtain £300 and people with disabilities will obtain £150 extra monetary assist from the federal government.
These will likely be paid by the federal government straight into the checking account of the recipient and never by way of vitality suppliers.
From Octopus Power:
For those who’re apprehensive about paying your payments proper now, head to our devoted assist weblog.
You’ll discover detailed details about our tariffs, background information on the vitality disaster, and a hyperlink to our Monetary Help kind, which directs you to other ways we may also help you for those who’re struggling to pay – together with a £15 million Monetary Hardship fund.
What are the Versatile Octopus costs from July 1st, 2023?
Your vitality costs rely upon the place you reside, and the way you select to pay. Beneath, we have included a breakdown of all Versatile Octopus charges and prices by area and fee technique.
Versatile Octopus costs for purchasers who pay by Direct Debit. It’s also possible to click on right here to obtain these costs in a PDF.
The Power Value Assure (the federal government assist that has been subsidising vitality prices) will not scale back fastened or commonplace variable costs after July 1st.
- Each buyer on Versatile Octopus could have their costs stored £12 beneath the Ofgem value cap (round £50 million in funding from Octopus).
- Good to know: for those who’re not paying by Direct Debit, you can save an additional £80 on common by setting one up.
Why do costs fluctuate based mostly on location and fee technique?
It prices us extra to provide vitality to some areas relying on issues like proximity to turbines, value of sustaining native networks and extra.
The identical is true with completely different fee 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 Value Cap.
Regularly Requested Questions:
Do the vitality value cap and / or the Power Value Assure have an effect on me?
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For those who’re on a variable tariff, like our Versatile Octopus, the Ofgem Value Cap shield the value you pay.
The value cap particularly applies to variable tariffs as a result of they aren’t fastened in opposition to the volatility within the vitality markets. Completely different suppliers can refer to those tariffs in a variety of methods; commonplace variable tariff (SVT), non-fixed, and many others. At Octopus our variable vitality tariff is known as Versatile Octopus.
For those who’d like to verify which tariff you are on, and particulars like your present costs and contract dates, you’ll be able to see them in your on-line account (scroll somewhat approach down and take a look at the small print beneath your property deal with).
You may learn extra concerning the vitality value cap and whether or not it impacts you on Ofgem’s web site.
How may I get vitality £80 cheaper by paying by Direct Debit?
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Our Versatile tariff could have barely completely different unit charges and standing prices based mostly in your fee technique. The £80 isn’t a flat low cost for Direct Debit prospects (or a cost on non-Direct Debit prospects) – it’s the standard financial savings a median house may see over a yr on the cheaper Direct Debit charges.
For those who change the way you pay, our system will decide that up and modify your charges mechanically, so for those who don’t have a Direct Debit proper now, it’s tremendous simple to entry the most affordable costs. All it’s essential do is ready 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 (and as an alternative paying on receipt of your invoice) prices us much more in admin.
We do not assume it is truthful to make everybody cowl that further value, so we do provide a less expensive fee for many who select to pay by Direct Debit, which prices us much less to handle.
We run an extremely environment friendly enterprise, which suggests you’ll nonetheless get an awesome value for those who select to pay a special approach – round £130 cheaper than the April Value Cap.
Is the £2,074 determine from Ofgem the utmost value I pays for vitality?
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No: this determine will not be absolutely the most a buyer may pay.
For those who’re affected by the value cap, the safety you obtain is relative to how a lot vitality you utilize.
Ofgem calculates the value cap based mostly on the yearly utilization of a typical medium consumption house (that is 2900 kWh of electrical energy and 12000 kWh gasoline per yr). It represents the utmost quantity Ofgem considers truthful for vitality suppliers to cost prospects on variable tariffs.
This determine is utilized by suppliers to use the value caps safety in opposition to every buyer’s precise utilization. Put merely: for those who use extra – or much less – vitality than that typical house, your individual yearly vitality prices on a tariff priced on the most charges could also be larger – or decrease – than that £2,074 determine from Ofgem.
What are the precise most unit charges and standing prices of the vitality value cap (adjusted for the Power Value assure)?
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The value cap units a most fee for:
- Power models: the value suppliers can cost variable tariff prospects per unit of gasoline and electrical energy you utilize
- Each day standing prices: 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 purchasers paying by direct debit – the unit charges will likely be:
Electrical:
- £0.30 p / kWh unit
- £0.53 p / day standing cost
Gasoline:
- £0.08 p / kWh unit
- £0.29 p / day standing cost
Vital 1 these figures look like rounded to the closest entire quantity, so the true figures could also be barely completely different. We’re working with Ofgem to get extra detailed data on these charges.
Vital 2 these are averaged figures from throughout all areas within the UK. As sure prices fluctuate, e.g. what transmission community charges we pay in an space, the precise most unit fee varies relying on area. There are different elements too: completely different most charges for Financial system 7 tariffs (which have a day and an evening value) and prepayment meters.
Extra data on different fee strategies will likely be added to this web page because it turns into obtainable.
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, in the marketplace it is offered on the similar, larger value of gasoline and different fossil fuels. That is all the way down to the way in which the market’s arrange. It is much like how homes are offered based mostly on the value of neighboring houses, slightly than what it value to construct. Learn extra concerning the newest within the vitality market.
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 several types of energy, from gasoline to renewables, to assist with its essential balancing job.
It would not be completely truthful to pay some vitality turbines much less for his or her energy once they’re fulfilling the identical vital operate. Which means the very best value finally ends up setting the market value. When gasoline costs are excessive, all electrical energy costs are too.
We’re pushing for a system during which an increasing number of 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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For those who’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, however your costs will likely be decreased by the Power Value Assure if they’re above the Power Value Assure charges.
We’ll all the time e-mail you upfront of your fastened tariff coming to an finish. In mild of the Authorities assist obtainable, fastened tariffs do not make quite a lot of sense in the intervening time, however when your fastened time period involves an finish, you’ll transfer onto Versatile Octopus.
For those who’d like to verify your present costs and contract dates, you’ll be able to see them in your on-line account (scroll somewhat approach down and take a look at the small print beneath your property deal with) or on any PDF vitality assertion. It’s often on the second web page, close to the highest of the breakdown in your electrical energy and / or gasoline prices for the interval.
