Octopus Energy has announced its standard tariff will undercut the April price cap by £50 – but there’s a catch.

The new rate applies to the Octopus Flexible variable tariff but it is only available to existing customers.

The tariff is being quoted at £1,971 per year based on someone using a typical amount of energy.

The rate will apply to anybody who joined the energy provider by March 3, 2022 or those coming off a fixed deal before April 2, 2022.

New customers will see default tariffs cost £1,969, £2 below Ofgem’s price cap, starting from April 2, 2022.

Why are energy bills going up in April?

In February, Ofgem announced the new energy bill price cap will rise by 54 per cent per cent from April.

It means energy prices will rise by £693 a year for millions of households after regulator Ofgem hiked the price cap on bills to £1,971 or 54%.

The energy regulator is responsible for the energy price cap which limits how much providers can charge customers on their energy bills.