What is likely to happen to energy prices in 2020
U-Switch report that there have been no widespread price changes so far in 2020. However, the so-called ‘big six’ energy suppliers decreased prices for their standard variable and prepayment customers in October 2019. And don’t forget, whether gas and electricity prices are rising or falling, it’s always a good idea to compare energy prices in your area. Following an increase in prices for millions of customers in April 2019, the major energy suppliers have now all lowered the cost of their standard tariffs in the region of 6%, with average bill drops of around £75. This is in reaction to a reduction in the energy price cap, set by industry regulator Ofgem. It’s estimated that around 15 million UK households will be affected by this latest round of energy price changes.
If you have never switched providers before It’s easier than you think to switch energy supplier. All you will need is your postcode and a recent bill showing your tariff and usage, there are so many comparison sites and each one will offer different incentives, so be sure to check out more than one and don’t worry if the provider is not a name you have heard of. One of the cheapest around is Avro Energy, it may not be a name that you have heard of but it doesn’t really matter as they are merely the provider of the bills, your Gas and Electric will still enter your home in exactly the same way.
There are several theories on what factors impact suppliers’ gas and electricity prices, and all of them have some element of truth but they’re not the underlying causes. Market forces can cause the wholesale price of gas to go up, which then means energy customers are charged a higher bill, but this isn’t the whole story.
The most recent wave of price changes have been in reaction to changes in Ofgem’s energy price cap. But how can a cap change the prices suppliers are allowed to charge? The cap was first introduced in January 2019 and limits the amount that suppliers can charge for standard gas and electricity tariffs. Many suppliers, including the big six energy providers, set their rates right up to the maximum allowed by the cap. Just a month after its implementation, Ofgem announced it would increase the rate of the cap to £1,254 per year. Many suppliers reacted by announcing price rises to come into effect when the price cap changed in April 2019. The cap was then reviewed again in August 2019, and lowered to £1,179 for standard variable tariff customers. This price change came into effect on 1 October 2019.
Our best advice is to ‘Shop Around’