Consumer Confidence in the Price Cap remains low says report

The survey of 2000 people showed that a quarter believe their energy bills had increased and a third were unaware that the price cap even exists . Older consumers were far more likely to be sceptical of the cap, with 58% of over 55s saying they didn’t believe that the cap will result in lower bills, a figure that was more than double that of those aged between 25 and 34.

The energy price cap was introduced by the energy regulator Ofgem to limit how much energy supply companies can charge their consumers for each unit of electricity and gas on default tariffs and pre-payment meters.

Currently the cap is at £1,179 for default tariffs and £1,217 for pre-payment meters. The cap is due to be revised in February and likely to be altered when the current period ends at the end of March. The price cap has created some controversy since its introduction with some complaining that energy suppliers using it as a target rather than a cap with many raising their prices.

Despite the lack of confidence from consumers there are now numerous tariffs that come in under the cap and that can provide savings for customers. According to the MoneySuperMarket report customers could save up to £300 by switching their energy supplier.

“Although awareness and 2019 switching levels are up, confidence in the price cap is low and our data shows that there are almost 150 tariffs that are cheaper than the cap. Despite this, not enough people are shopping around for a better deal when their current one comes to an end, even though doing so only takes minutes and could save them hundreds of pounds per year. The cap appears to have added confusion for consumers, rather than savings. Our message is clear – don’t rely on regulation to reduce your bills. Take matters into your own hands and shop around for the best deal for your needs,” said Stephen Murray, energy expert at MoneySuperMarket.

A separate report published by Which? Meanwhile shows that there are now five times more energy deals costing less than £1,000 per year. The number of cheap deals available in January 2020 is up 80% compared to 2019.

Natalie Hitchins, head of home product and services at Which?, said: 'As customers look to save money in the new year our research found that, one year on from the introduction of the energy price cap, there were more cheap deals for customers to choose from.

'We'd urge customers, especially those on default tariffs, to consider reviewing their current energy deals - you could find a provider that offers potentially better customer service and save you around £300 a year.'

Despite the low confidence in the price cap 2019 was a record year for customers switching their energy supplier with over 5 million switches being recorded.

With switching now being easier than ever, energy supply companies need to come up with ways to keep the customers they have.

Read our tips on how to keep energy customer here