British Gas unveils vitality deal promising to beat Ofgem worth cap

  • Britain’s largest vitality agency has new tariff pledging to undercut the worth cap 
  • The deal solely guarantees to avoid wasting households cash on vitality payments till July

British Gas has launched a fixed-rate vitality deal it guarantees will beat the Ofgem worth cap till not less than July.

Britain’s largest vitality agency has unveiled its Price Promise tariff which prices £1,699 a yr for the common twin gas family.

That is £229 beneath the present Ofgem worth cap degree of £1,928 a yr.

The promoting level of the deal is that it additionally guarantees to beat the worth cap from April, when professional analysts at Cornwall Insight say this may drop to £1,620 a yr.

Price-buster?: British Gas's new energy deal promises to beat the price cap - but not forever

Price-buster?: British Gas’s new vitality deal guarantees to beat the worth cap – however not eternally

However, this price-busting deal solely runs for the primary 5 months, or one-third of the general deal size of 15 months.

After that time, British Gas clients could find yourself paying greater than any price-capped price, and face excessive exit charges to go away early.

Catherine O’Kelly, of British Gas, mentioned: ‘We are at all times in search of methods to assist our clients save and we need to be sure that they really feel the advantages of decrease vitality prices as quickly as attainable – and may reap the benefits of them whereas utilizing extra vitality within the winter interval. 

‘They even have peace of thoughts that if the worth cap drops in April and is cheaper than this tariff, we’ll decrease our charges to beat it.’

What is the Ofgem worth cap? 

The worth cap set by vitality regulator Ofgem limits how a lot vitality companies can cost clients on variable-rate offers.

Most properties now have variable price vitality tariffs attributable to an excessive scarcity of low cost mounted price offers.

The worth cap works by limiting how a lot an vitality agency can cost clients for items of vitality and their standing cost.

But it doesn’t cap how a lot clients pay general, so payments will range. 

Is the brand new deal any good?

To work out if the British Gas deal is cheaper than your present deal, use a worth comparability device on the vitality agency’s web site

An instance two-bedroom, two-person family at present paying £131 a month for fuel and electrical energy is being quoted £102.63 a month with the Price Promise deal – a saving of £28.37 a month. 

But after all that saving solely applies till April, when Ofgem resets its worth cap once more.

British Gas has not mentioned what it’s going to cost clients for the Price Promise tariff previous April, however does promise to beat no matter the brand new worth cap will likely be. 

That means clients pays a price beneath the worth cap till the worth cap is reset once more, in July. 

Past that time British Gas has made no guarantees that its tariff will beat the Ofgem worth cap. 

That might imply clients who take the Price Promise deal out immediately threat paying charges above the Ofgem worth cap for so long as 10 months, because the deal is mounted for 15 months.

Getting out of the Price Promise deal earlier than the 15-month finish level means paying pretty hefty exit charges. 

What are the exit charges? 

The exit charges for the Price Promise tariff are £75 every for fuel and electrical energy. 

That is steep by historic requirements, when exit charges usually topped out at £30 per gas – with many offers not having them in any respect.

Sadly £75 per gas exit charges are about common now, as vitality companies have been climbing these expenses.

There aren’t any exit charges for the Price Promise for those who swap to a different British Gas mounted tariff, though these charges will be even increased on the vitality agency’s different fixes.

For instance, exit charges are £200 every per gas on British Gas’s The Fixed One 24M v5 vitality tariff.