Currently, Ofgem’s price cap sits at £1,928 however from April until June, the price cap drops to £1,690 per year for a typical household paying by direct debit – EDF’s new tariff sits at a rate of £1,581
EDF Energy has just launched a new fixed rate tariff which is almost £350 below the current price cap.
The energy firm’s new 12 month fixed rate deal sits at £1,581 per year and is available to both existing and new EDF customers. This is £347 cheaper than the current Ofgem price cap, which is £1,928. Existing customers can directly access the deal, while others can sign up through Uswitch.
The Ofgem price cap is applied to “default” tariffs which are also known as standard variable rate (SVR) tariffs. You’ll be on one of these if you’re not locked into a fixed deal, or you didn’t switch to a new tariff when your previous fix expires.
From this June, the Ofgem price cap drops to £1,690 per year for a typical household paying by direct debit. It means the EDF tariff will remain below the lower cap in April by £109. According to EDF, customers who switched to the new deal will be paying the following rates for the next year:
- 5.62p per kilowatt hour (p/kWh) for gas
- 23.74p/kWh for electricity
- A standing charge of 32.04p per day for gas
- A standing charge of 40.78p per day for electricity
However, those looking to switch should be aware that the tariff does have an exit penalty of £75 per fuel for switching to another supplier within the term, although this does not apply for transitions to another EDF fixed tariff. Ofgem’s price cap will change again in July and this could go down again – as well as up. This means you could potentially be stuck paying more if the price cap falls further.
It’s also important to know that the price cap – and EDF’s new tariff – does not set a limit on how much your energy bill will be. Instead, it sets a cap on how much you can be charged. This means if you use more gas and electricity your energy bills will be more expensive than the headline figure. Ofgem’s headline figure is based on a household using 2,700 kwh of electricity and 11,500 kWh of gas over 12 months.
Will Owen, energy expert at Uswitch.com, said it was “great” to see competition in the market again particularly from well known suppliers such as EDF. They said: “Customers have been under the cosh from sky-high prices for years, so it’s a big step to see tariffs priced lower than the upcoming cap, and the cheapest we’ve seen since late 2021.
“At £1,581 for the average household, this should be worth considering for those wanting to take advantage of falling rates and lock in price certainty for 12 months. If you decide to stay put on a standard variable tariff, it’s worth noting you will see your energy costs change every three months in line with the price cap. We don’t expect this deal to be available for long, and EDF reserves the right to remove the deal at any time. We’re hopeful this will encourage more suppliers to price competitively to finally give customers choice – and financial relief – on their energy bills.”
