While millions of UK households are breathing a sigh of relief with the latest energy price cap drop, a stark warning from consumer champion Which? reveals a hidden crisis. A shocking number of families remain trapped on brutally expensive default tariffs, potentially overpaying by a staggering £300 or more annually.
The Price Cap Paradox: A False Sense of Security
The Ofgem energy price cap fell by 7% on 1st July, lowering the typical annual dual-fuel bill to £1,568. This headline figure, however, masks a critical detail. The cap only sets a maximum unit price for energy, not a total cap on your bill. Your final amount is still determined by how much gas and electricity you actually use.
More alarmingly, the cap only applies to standard variable tariffs (SVTs) and default deals. It does not protect those on fixed tariffs, which can be significantly more expensive.
The Loyalty Penalty: How Default Tariffs Are Costing You
Which? research has uncovered a disturbing trend. Major suppliers are routinely offering their cheapest rates exclusively to new customers, while existing loyal customers are left languishing on the provider's standard variable tariff (SVT)—which is now substantially higher than the best fixed deals on the market.
Emily Seymour, Which? Energy Editor, stated: "The energy market is wildly unfair. It's shocking to see such a huge gap between what loyal customers pay and the deals available to switchers. With many fixed deals now well below the price cap, there is absolutely no reason to be on a standard variable tariff."
Take Action: How to Slash Your Energy Bills Now
Don't fall into the loyalty trap. Proactive consumers can unlock significant savings. Here’s what you need to do:
- Check Your Current Tariff: Are you on a standard variable or default tariff? This is the first step to understanding if you're overpaying.
- Use Ofgem-Approved Comparison Sites: Websites like Which? Compare or Energy Helpline are accredited to show the full market, including exclusive deals you can't find elsewhere.
- Consider a Fixed Deal: With many fixed-rate tariffs now cheaper than the price cap, locking in a rate can protect you from potential market volatility and save you money.
- Don't Wait: The best deals are available now. The savings you can make by switching away from a default tariff are real and immediate.
The message is clear: the era of simply sticking with your supplier is over. In today's market, active engagement is the only way to ensure you are not subsidising better deals for new customers at your own expense.
