The energy price cap is disincentivising people from switching energy supplier.
That’s according to new research from comparethemarket, which reveals switching levels in the domestic energy market have fallen since the energy price cap was brought into action in January 2019.
It notes levels have reduced despite the fact fixed-rate deal prices fell to their lowest level in nearly three years in April 2020 and warns consumers not to be ‘lulled into a false sense of financial security’ when the Default Tariff Cap falls from its current ceiling of £1,126 to £1,042 per annum for the average consumption household on 1st October.
It highlights there are currently 218 tariffs on the market that are cheaper than the imminent price cap level, emphasising the average price for the twenty cheapest available tariffs on the market sits at £851, with the cheapest coming in at £252 below the cap level.
Peter Earl, Head of Energy at comparethemarket, said: “The cap was originally introduced with the worthy goal of preventing energy suppliers from hiking prices unfairly for their more loyal customers and charging them over the odds for their energy.
“In practice, however, confusion about the price cap could be leading people to pay more for their energy than they ought to. As the long list of tariffs priced cheaper than the cap demonstrates, the new cap is not a good price to pay for energy – far from it.”
A BEIS spokesperson said: “Ofgem and market data shows that switching levels have continued to increase since the price cap was introduced in January 2019.
“The price cap is protecting around 11 million households from rip off deals so that everyone pays a fair price for their energy. However, shopping around is the best way to ensure customers get the cheapest deals.”