Octopus Energy announces new tariff that's £50 cheaper than April price cap
Octopus Energy has announced a new loyalty tariff that is £50 cheaper than the price cap which is set to increase in April.
The new Octopus Flexible tariff will kick in from 2 April and is a temporary measure to help struggling families, the firm said.
The tariff is being quoted at £1,921 a year for someone with typical energy use, while the price cap will increase to £1,971 for direct debit customers - up from the current level of £1,277.
The supplier is also doubling its Octopus Assist fund to £5 million to help ease the burden on hard-up families.
Who is eligible for the tariff?
The new Octopus rate only applies to customers who joined the energy firm by 3 March 2022 or if you’re coming off a fixed deal before 2 April 2022.
Every Octopus customer on a Standard Variable Tariff will get £2 off the price cap - existing or new.
You will pay £1,969 rather than the £1,971 that’s to come with the new price cap in April.
Loyal Octopus customers get an additional £48 rebate applied via their electricity charges which is automatically calculated and applied every month.
You will pay £1,921 a year - £50 less than the price cap.
The supplier announced the change in a blog post on its site, and tweeted the news to its followers.
What else is Octopus offering to its customers?
The energy supplier is doubling its Octopus Assist fund to £5 million to help struggling customers.
The fund is a grant for the most hard-up families, who can claim between £50 and £500.
On average, most have been sent £100.
The provider has already helped 30,000 customers through the fund since its launch in November 2021.
There’s no deadline to apply for this either but it is recommended to claim as soon as possible if you think you are eligible.
How do I check my tariff with Octopus?
If you are an Octopus customer, you can check which tariff you’re on in your online account.
If you are already on the flexible tariff you won’t need to do anything, the lower prices will kick in automatically from 2 April.
If you are affected you will be sent an email from the supplier explaining what the cost difference means to your bills.
Customers will hear from the supplier over the next few days, Octopus said.
If you are on a fixed tariff you won’t be impacted by the change as your price is locked in for your deal period.
But once your deal ends, you should be moved on to the Flexible Octopus, so you will still be paying under the price cap.
New customers who switch to Octopus can choose its Flexible tariff to pay less than the price cap - you will also automatically qualify for the Loyal Octopus support.
But it is important to check if the deal is right for you before you make the switch - and have a search surrounding the most suitable offer for your budget.
When is the price cap increasing?
The energy price cap will increase on 1 April.
It sets the maximum figure that a customer can be charged on a variable dual-fuel rate, and typically changes twice a year.
The price cap refers to the cost per unit and the daily standing charge you pay, so your actual bill will still always depend on how much energy you use.
Energy companies can charge up to this price, but not more. However, because gas prices are sky-rocketing, most of the providers are charging customers the full amount.
What are other energy suppliers offering?
Currently Octopus is the only provider offering a price cheaper than the price cap.
The majority of energy firms have hiked their standard tariffs to the maximum allowed by the April price cap - including British Gas, E.on and Bulb.
Outfox the Market, Scottish Power, Shell Energy are also increasing their rates to £1,971 level.
While EDF Energy, Ovo and SSE are £1 cheaper at £1,970.
Utility Warehouse is £11 cheaper than the April price cap at £1,960.
Other energy firms have been launching flash sales offering cheap fixed deals, but these have disappeared within hours after huge demand.
For example, earlier this month, a cheap fixed-rate deal by E.on was pulled just hours after it was flagged by Martin Lewis.
The MoneySavingExpert founder flagged that the E.on Next Online V11 one-year fix was set at the same rate as the April 2022 price cap.
What other help is there?
Struggling families can get grants worth up to £1,500 to pay off their energy debts.
It’s similar to Octopus’ up to £500 grant for its customers but it has got some tough requirements.
You can’t have already been given a payout from the fund in the last two years, or savings of more than £1,000.
You should also have evidence that you are already receiving help from a money advice agency such as Citizens Advice or National Debtline.
To save money it is also worth taking a look at your consumption at home, keeping costs down by making simple changes.
Will the Ukraine war affect energy prices?
The Ukraine crisis means energy prices are predicted to rise even further later this year.
We could see another 40% rise on the price cap in October, experts are warning.
This would take the typical bill for an average energy user to £2,900 per year or more.
A version of this article originally appeared on NationalWorld.com