Big six supplier Npower has launched a standard variable tariff (SVT) price cap tracker tariff following a successful trial earlier this year.
The Cap Tracker December 2020 tariff offers Npower’s customers a six per cent discount to the SVT price cap and has the ability to move up or down, depending on the movements of the cap.
The direct debit for the average customer is priced at £1,179, £75 below the current cap.
A spokesperson for Npower said: “This product is ideal for customers who like the confidence and peace of mind of knowing their price is constantly tracking below Ofgem’s independent index.”
Ofgem’s revised price cap came into effect today (1 April) and was set at £1,254 – an increase of £117 for SVT customers.
The price cap for pre-payment meter customers increased by £106 to £1,242 a year for the same period of a six-month “summer” price cap.
A rise in wholesale prices was cited by industry regulator Ofgem as being largely responsible for the price cap increase.
The cap will be revised again later this year, with industry experts predicting it to fall following a decrease in wholesale prices.
All six of the large suppliers have raised their default tariffs in line with the increase but some smaller suppliers have announced they are lowering their prices.
Today’s rise has prompted concerns from the sector, with many urging customers to switch away from standard variable tariffs (SVTs).
Natalie Hitchins, Which? head of home products and services, said: “Many people who hoped the price cap would bring an end to unwelcome price increases will be left reeling after price hike Monday adds more than one billion pounds to their energy bills.
“If you are one of the millions of energy customers stuck on a rip-off standard variable or default tariff, our advice is simple – switch as soon as possible.
“There has been a recent rise in the number of cheap deals on the market – so you could choose better customer service while potentially saving more than £300 a year.”
Stephen Murray, energy expert at MoneySuperMarket, said: “This price rise might sound like an April fool, but unfortunately it’s no laughing matter.
“With the clocks going forward and summer on the way, you might not think now is the time to tackle your energy bill, but it really is.
“If you switch today to a competitive tariff with a big six or emerging provider, you could ignore all the noise from the regulator and see your annual bills come down by £250 or more.”