Ofgem’s Quarterly Energy Price Cap: What It Means for Your Wallet
In a move that feels like a mid‑season coaching change, Ofgem announced today that the annual energy price cap will now be reviewed every three months instead of every six. The swap is pitched as a way to stabilise the market and keep more suppliers from going out of business, especially after last winter’s record‑high gas and electric prices fueled by the Ukraine war.
What the Change Actually Triggers
- More frequent cap updates: July, October, January and April now become the new “cap‑check” moments.
- Potential for faster bill swings: Homes could see their bills climb or drop quicker than before—no more the gentle half‑year lull.
- Muddling the uncertainty: Critics say the tighter rhythm might leave struggling households wondering what their next bill might look like.
Voices on the Frontlines
GMB Union’s take: “The new cadence could mean bills rise even faster for people already fighting to keep the lights on,” warned GMB National Secretary Andy Prendergast. He added that while the cap could theoretically let prices fall sooner if the market improves, it also lets them climb so quickly that the stress could become unbearable.
National Energy Action’s Peter Smith: “Every extra hike that hits right after Christmas is a double blow—fans of cold weather already feel the stress. 2‑month flashes of news don’t give people the breathing room they need.” He forced Ofgem to reconsider whether to push the first jump into April when summer heat and demand start to wind down.
Ofgem CEO Jonathan Brearley: “We’ve had to make hard choices, but our goal is not to add to your frustration. The price cap will still reflect the real cost of your energy, and we’re working with government, consumer groups and the industry to keep the support coming.”
Business, Energy & Industrial Strategy Committee: John Darren Jones pointed out that while the quarterly changes curb supplier busts, they also mean customers see more incremental increases. He called for a “social tariff” to give low‑income households a smoother ride.
What’s This All About Behind the Curtain?
Essentially, the price cap acts as a regulatory “floor” that tells suppliers they can’t charge more than a certain amount per kilowatt‑hour. A quarterly review means that if the market pulls back or shocks again, the cap will be adjusted sooner rather than later.
How This Can Affect You
• Big headline numbers? The average bill is already slated to jump in the order of £1,200 a year—a 177% rise since last October. A 3‑month review only boots this pattern up a little more.
• Ricky‑level cold? Because the real highs happen in the deep winter months, this can spell a sudden hike in those months when you’re already feeling every clink of the heater.
• Good news? The regulator promises to tell you when your bill will actually be cheaper/cheaper faster.
The Energy Bills Support Scheme (EBS)
If you’re worried about the rising costs, the Energy Bills Support Scheme is there to help. Think of it as a safety net: it may give you a short‑term upside hand by covering a portion of your electricity or gas bill during the most expensive months. If you’re on a pension, a low income pension, or a charity pension, you might qualify for the 100% payout.
