British Gas has unveiled an energy deal promising to beat Ofgem’s price cap until at least July

  • Britain’s largest energy company has a new tariff that it pledges to undermine the price cap
  • The deal only promises to save households money on energy bills until July

British Gas has launched a fixed-price energy deal which it promises will exceed Ofgem’s price cap until at least July.

Britain’s largest energy company has unveiled a ‘Price Promise’ tariff that will cost the average dual-fuel household £1,699 a year.

That’s £229 less than the current price Ofgem’s maximum rate level is £1,928 per year.

The selling point of the deal is that it also promises to beat the price cap from April Expert analysts at Cornwall Insight say this will fall to £1,620 a year.

Beating prices?: British Gas' new energy deal promises to beat the price cap - but not forever

Beating prices?: British Gas’ new energy deal promises to beat the price cap – but not forever

However, this price-cutting deal only lasts for the first five months, or a third of the deal’s total 15-month duration.

After this point, British Gas customers may end up paying more than whatever price is quoted, and face high exit fees for leaving early.

Catherine O’Kelly, from British Gas, said: “We’re always looking for ways to help our customers save and want to make sure they feel the benefits of lower energy costs as soon as possible – and can take advantage of them while they’re in use.” More energy in the winter period.

“They also have peace of mind that if the price cap falls in April and is cheaper than this tariff, we will lower our prices to overcome it.”

What is Ofgem’s maximum price?

The price cap set by energy regulator Ofgem limits the amount energy companies can charge customers on variable rate deals.

Most homes now have variable energy tariffs due to a severe shortage of cheap fixed rate deals.

A rate cap works by limiting the amount an energy company can charge customers for energy units and their standing fees.

But it doesn’t specify the total amount customers pay, so bills will vary.

Is the new deal good?

To find out if a British Gas deal is cheaper than your current deal, use Price Comparison tool on the energy company’s website.

For example, a two-bedroom family of two currently pays £131 a month for gas and electricity, with £102.63 a month being offered with the Price Promise deal – a saving of £28.37 a month.

But of course this saving only applies until April, when Ofgem resets the price cap again.

British Gas did not say what it would charge customers for its Price Promise tariff last April, but it promised to beat the new price cap no matter what.

This means customers will pay a price below the price cap until the price cap resets again, in July.

After this point, British Gas made no promises that its tariff would exceed Ofgem’s price cap.

This could mean that customers taking out a Price Promise deal today risk paying prices above Ofgem’s maximum price for up to 10 months, as the deal is fixed for 15 months.

Exiting a price promise trade before the 15-month endpoint means paying a fairly hefty exit fee.

What are the exit fees?

The exit charge for the Price Promise tariff is £75 for both gas and electricity.

This is expensive by historical standards, with exit fees typically reaching £30 per fuel – with many deals having no such charge at all.

It’s unfortunate that fuel exit charges are around £75 on average now, as it is Energy companies have raised these fees.

There is no exit charge for the Price Promise if you switch to another British Gas fixed tariff, although these charges can be higher than that for other energy company fixes.

For example, the exit charge is £200 per fuel on British Gas’s The Fixed One 24M v5 energy tariff.

(Signs for translation) Daily mail

Leave a Reply

Your email address will not be published. Required fields are marked *