A year on from the launch of the energy price cap, new research from MoneySuperMarket reveals that nearly half (45%) of people surveyed do not believe it will lower their bills.
The price cap on standard variable tariffs was introduced by Ofgem on 1st January 2019 in a bid to help reduce the cost of energy bills for households. Initially, the level of the price cap was set at £1,137, which increased to £1,254 within three months of the launch. The cap currently sits at £1,179.
The research reveals that there has been a 37% increase in people knowing how much they are paying for their energy. Despite this, it appears that the price cap has had little impact on their willingness to search for a better deal, with two thirds (64%) believing that it has made no difference whatsoever. Over a third (35%) also revealed that they will not shop around for a new deal when their current tariff ends.
Since the introduction of the price cap a year ago, only 5% of bill payers have seen their bills decrease. A quarter (26%) of people note that their bills have actually increased, while two thirds (69%) believe that their bills have stayed the same.
Doubt about the effectiveness of the price cap is highest amongst older people and then reduces by age group. 58% of over 55s do not believe that the price cap will lower bills, more than double the number (27%) aged 25 – 34 who hold the same belief. A third (36%) of bill payers are unaware that the price cap exists.
Stephen Murray, energy expert at MoneySuperMarket said, “The price cap was intended to protect consumers by ensuring a ‘fair price’ for energy that would result in savings for millions of people.
“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 III.
“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.”