Ofgem has confirmed price protection for 11 million customers on poor value default tariffs will come into force on 1 January 2019.
Ofgem has set the final level of the price cap, following the regulator’s statutory consultation published on 6 September, at £1137 per year for a typical dual fuel customer paying by direct debit.
When the price cap comes into force suppliers will have to cut the price of their default tariffs, including standard variable tariffs, to the level of or below the cap.
The cap will save customers who use a typical amount of gas and electricity around £76 per year on average, with a typical customer on the most expensive tariffs saving £120.
The savings for individual customers will depend on how much energy they use, the price of their current tariff, whether they have both gas and electricity and how they pay for their energy. In total, the price cap will save consumers in Great Britain around £1 billion.
Households protected by the cap will still be able to save even more money by shopping around for a better deal.
The price cap level will be updated in April and October every year to reflect changing wholesale costs.