EDF will increase its standard variable rate (SVT) prices from October 1st to an average of £ 1,277 / year based on typical usage. It is the first of the major energy companies to confirm its price hike after Ofgem announced it would raise the cap on both standard and standard tariffs from October – more are expected to follow, as the largest providers usually keep their standard tariffs at or within a pound of the cap.
To beat the hike, see if you can save with a full market comparison through our free Cheap Energy Club.
EDF increases the prices to the maximum allowed
As part of the upper price limit, providers are limited in terms of their variable standard tariff. However, regulator Ofgem announced on Friday August 6 that it would raise the price cap to its highest level after wholesale prices soared this year. In typical usage, the energy price cap for a typical dual fuel household paying by direct debit will increase from £ 1,138 / year to £ 1,277 / year.
However, keep in mind that this is NOT the maximum that everyone will pay. The cap sets a maximum amount for the gas and electricity price you have to pay – use more and you pay more, use less and your costs are lower.
When you are with EDF, your bills will change as follows:
- If you have a credit meter and are using the standard variable rate, the rate will increase on October 1st. EDF’s SVT pricing is currently at the cap of £ 1,138 / year for typical usage and is increasing to the maximum allowed under the new cap of £ 1,277 / year.
- If you are a prepaid customer, the price will also increase on October 1st. Similarly, EDF’s standard prepaid rate will be increased from the current maximum amount allowed under the price cap to the new limit of now £ 1,256 / year to £ 1,309 / year from October.
- For a fix deal, the price will NOT change until your fix is available. However, if your fix ends after October 1st and you don’t switch, you will be switched to EDF’s standard variable tariff, which the price increase has made even more expensive.
You could save a massive £ 200 + / year by switching
Compared to EDF’s new SVT price, switching to what is currently the cheapest on the market would save an average of £ 215 / year based on typical usage. And if you’re on one of these limited plans, you can’t be billed for exit fees, so you can switch whenever you want.
You can use our Cheap Energy Club to compare the entire market or use our popular Pick Me A Tariff tools where you tell us your preferences and we will find your top pick tariff.
How does the price cap work?
The price cap limits the maximum amount that providers can charge for each unit of gas and electricity you use, and sets a maximum daily base fee (what you pay to connect your home to the grid).
Currently, someone who uses a typical amount of energy at a Standard or Standard rate pays a maximum of £ 1,138 a year on average, but as of Friday October 1st, it should be £ 1,277 a year.
Because the cap limits the price that providers can charge for each unit of gas and electricity, you pay more when you use more energy; use less and pay less.
The price cap is reviewed twice a year, with changes coming into effect in April and October. It is set to remain in force at least until the end of this year, with Ofgem recommending annually whether it should continue until 2023.
Are you having trouble paying your bill? There is a lot of additional help
Between the impact of the pandemic on people’s finances, the imminent end of the vacation program and the universal loan changes, another hike in the price cap is another bad news for household finances, especially since it comes right when the weather turns colder and the People are starting to use a lot more energy.
Fortunately, if you run into trouble, help is available. Emergency measures that have been taken to help people struggling with bills due to the coronavirus are still ongoing. Most importantly, your supplies are not interrupted – the disconnection from standard credit counters has been suspended while prepaid customers can get emergency or additional credit to ensure the lights stay on.
There are also a number of options vendors can offer if you’re struggling, including full payment plan reviews, affordable debt settlement plans, payment breaks or cuts that give you more time to pay and access to hardening agents. This all happens on a case-by-case basis. So contact your supplier as soon as possible if you have any problems.
And last month, 26 suppliers, covering over 90% of households, signed an industry commitment to reach those who need help most this winter. The commitments include efforts to increase awareness of the help available, make it easier for customers in financial difficulties to contact them, improve billing accuracy, and increase the installation of smart meters for prepaid customers.
There are also a number of energy grants to help people with certain benefits with winter bills. For full details, please see our Guide to Housing and Energy Subsidies or visit the Ofgem website for a full overview of what is available and what to do if you are having trouble paying.
Why are prices rising?
Ofgem said the price hike was due to wholesale gas prices, which have risen by over 50% since the regulator’s last update of the price cap six months ago – and have hit record highs due to increased energy demand as lockdown measures have been eased around the world.
What does EDF say?
Philippe Commaret, Managing Director of Customers at EDF, said: “We know that a price increase is never welcome, especially in difficult times, lower prices as soon as we can.
“As Ofgem explained, it is global gas prices that have caused the unprecedented rise in wholesale energy costs and as a sustainable, long-term business, we need to reflect the costs we face.
“We’re going to provide financial aid to those most in need through our £ 1.9m Relief Fund, helping our customers cut their bills, manage their debts and even help with the costs of things like more energy efficient white goods.
“Customers with tariffs due to be changed in October will be contacted and reminded to verify that they have the best tariff for them.”