The price cap was first introduced by energy regulator Ofgem on January 1, 2019.
This is the second consecutive drop after a typical bill fell for the first time in two years back in July.As aforementioned, the cap does not set an upper limit on actual bills - it's on the cost per unit - and you will pay more or less depending on how much energy you use.The cap is applied to customers on a default energy tariff including those who pay by direct debit, standard credit, prepayment meter, or who have an Economy 7 meter.
A social tariff would offer cheaper gas and electricity to those most in need, such as disabled people, the elderly, or those who claim Universal Credit, for example.This was promised in the Autumn Statement 2022, with the commitment repeated multiple times since then by the prime minister and other Cabinet members.Ofgem chief executive Jonathan Brearley is one of many to question the effectiveness of the price cap and point towards the benefits of a social tariff.
"The energy market is broken – the limited competition there is hardly impacts what people pay. Even when there was competition, it failed many elderly or vulnerable people unable to take advantage of deals.