The energy 'price cap' is the maximum an energy supplier can charge customers on variable tariffs for a unit of energy. Variable tariff means your prices can change with reasonable notice, unlike fixed price tariffs where your prices can’t change for the length of your contract.

The price cap is reviewed twice a year by the Government’s energy regulator, Ofgem, and a new price set for 1 April and 1 October.

You can read more here.

The Government set a fair price based on their understanding of the costs energy suppliers face in the wholesale market. They review this price cap regularly to ensure it’s still fair.

As wholesale prices have risen to an all-time high, the Government is adjusting the price cap to ensure suppliers can fairly reflect the price at which they buy their energy in the charges they apply to customers. Unfortunately, due to the large increase in wholesale costs, suppliers have been buying energy at a higher price than they were allowed to sell it for. So the Government has had to increase April’s price cap to a rate that is considerably higher than on previous occasions.

The reasons for the dramatic rises in wholesale prices are complex, but some of the factors affecting them are:

• Competition in international gas markets – for example, droughts in China have affected hydropower generation, and have led to higher demand for gas.

• Unseasonal low temperatures causing greater demand for energy. 

• The UK’s low gas reserves, due to infrastructure changes and greater demand.

• Significant proportions of UK electricity are being generated by gas power plants, so changes to wholesale gas costs also affect electricity production.

• Over-reliance on gas from Russia, which is providing lower volumes than expected. 

• Unforeseen outages at UK power stations.

• High carbon-offsetting costs for fossil-fuel generation. 

• Lower wind output than typical, affecting energy production on wind farms.

This is the price suppliers, like UW, pay to buy energy.

If you’re on one of our variable tariffs or have a prepayment meter, then the answer is yes. 

If you’re on a fixed tariff you won’t be affected during your agreed fixed period.

Nothing. We’ll contact customers throughout February and March to let you know how your prices will be affected.

Price changes will take effect from 1 April 2022.

You’ll see the change in your May bill for all charges after 1 April. 

If you pay by Budget Plan, the amount you pay each month will be reviewed during the coming months, so your payments won’t change right away. We’ll be in touch if they need to change.

Energy bills are made up of a combination of fixed costs and ones that change based on how much you use. The daily standing charge is how fixed costs are passed on to energy customers. It covers things like the cost of renting the meter on your wall, to maintaining the network of overhead cables and pipes that brings gas and electricity to your home. These fixed costs have increased due to a number of factors, including the cost of moving customers who were with a failed energy supplier to a new supplier, and increases in the cost of the green levy and the warm home discount.

All suppliers have been impacted by soaring wholesale prices and will be increasing prices for customers that are on tariffs affected by the price cap.

The simple answer is yes, you’re in good hands. UW isn’t at risk of going bust. Firstly, the structure of our wholesale energy agreement means that the cost of the energy we buy is protected against pricing volatility, both today and in the future. 

Secondly, we’re more than just an energy provider. We have a unique multiservice offer that also spans broadband, mobile and insurance. This generates a number of different revenue streams and means we’re not solely reliant on energy. 

And finally, we’ve always taken a long-term approach to pricing while still offering competitive tariffs to all our customers. We’ve spent the last 25 years building a stable and sustainable business, and we plan to be around for many years to come.

We recognise that some UK families are facing a serious challenge. But you’re in good hands with UW. We’re the only supplier offering customers on variable energy tariffs a guaranteed discount of up to 5%* below the price cap set by the Government. 

Here are a few other ways we can help families to save a little more each month.

If you’re having difficulty paying for your energy, it’s important you speak to us for support. You can find information on the support you can receive on the Help pages below:  

• Credit meters

• Prepayment meters