E.ON adds £117 to bills days after price cap hike
This means suppliers will not be able to charge customers on standard variable or default tariffs more than £1,254 a year.
And E.ON has wasted no time in hiking prices in line with the new cap.
It has become the first supplier to announce higher prices for its 1.8 million customers on its standard variable tariff.
Customers will see their bills rise by £117 or 10% from 1 April, making E.ON’s standard tariff £286 more expensive than the cheapest deal on the market, according to Uswitch.
Pre-payment meter customers will also face a £106 price rise.
An E.ON spokesperson said: “Ofgem’s energy market price cap review set out that price cap levels would increase, driven by rising wholesale and other costs.
“In line with that, we’ll be making changes to our standard variable tariff prices from 1 April and expect to see similar movements across the energy industry.
“Prices will not change for existing customers until then. Over the coming weeks we’ll be writing to affected customers explaining what the changes will mean for them and encouraging them to choose the best tariff for their needs.”
The energy price cap came into force on 1 January with the aim of giving customers on standard tariffs a better deal.
The cap is updated every April and October to take into account the varying costs of wholesale energy.
Rik Smith, energy expert at Uswitch, said: “Predictably, just four days after Ofgem announced it is raising the level of the price cap, we’re seeing suppliers start to raise prices, with E.ON hiking bills for customers on its standard tariff.
“E.ON customers should not fall into the cap trap – a capped deal is not a good deal and standard plans are going to be more expensive in April than before the cap was introduced.”
He added that the limit set by the regulator effectively dictates how suppliers will purchase gas and electricity for their standard tariffs, which could restrict how suppliers differentiate themselves and enables them to pass through cost changes swiftly.
“Standard tariffs were a bad deal at the old cap level and they’ll be an even worse deal at the new level.
“E.ON customers should shop around and lock in a cheap fixed plan now to protect themselves from the risk of twice yearly price changes. Households still have time to switch now and protect themselves from a £117 bill hike,” Smith explained.