Energy costs are set to fall for millions of customers on standard variable tariffs this autumn, but it’s possible to reduce bills further by moving to a cheaper deal.
Ofgem, the energy regulator, will announce a new price cap on 7 August to protect consumers on standard tariffs who don’t switch suppliers from overpaying for their energy. The new cap will come into effect from 1 October.
The price cap is updated twice a year and on April 1, it fell by £17, so that the maximum that a typical dual-fuel household (who gets their gas and electricity from the same supplier) currently pays is £1,127 a year. Some expect the cap to fall by as much as £85 in October due to lower wholesale energy prices.
Stephen Murray, energy expert at comparison site MoneySuperMarket.com said: “The expected news that Ofgem is due to drop the price cap by £85 is good news at first glance, but there are more savings to be had if people switch to a fixed tariff now. This will allow them to make the most of the current low wholesale energy prices.
“Our view on the price cap has always been clear: don’t rely on the cap to reduce your bills. If you’re on an expensive standard variable tariff and want to save hundreds of pounds on your annual bill, switch your energy supplier as soon as you can.”
Beware higher energy usage
Saving on energy costs is more important than ever this year as many of us have spent more than we normally would on gas and electricity due to lockdown measures introduced to slow the spread of coronavirus. According to Energyhelpline.com, across the UK, Britons are predicted to have used 30% more energy than normal due to spending more time at home.
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Tom Lyon, Director of Energy for energyhelpline, said: “Fortunately, it’s easy to reduce the risk of domino energy debts – all you need to know is what to do. The most painless way to bring down your bills is simple – just switch to save on energy.”
Check when your tariff ends
If you’re not on a standard tariff, check when your current deal ends so that you can transfer to another competitive deal then.
Data from uSwitch.com reveals there are 125 fixed deals from 21 suppliers ending in July and August, and customers usually are automatically moved onto a default variable tariff.
USwitch says one of the cheapest fixed deals is currently the Simple and SuperGlow tariff from Avro Energy at £810 fixed for 12 months, which is £316 cheaper than the current £1,127 default price cap.
Sarah Broomfield, energy expert at Uswitch.com, said: “With some families facing financial difficulties and uncertainty at the moment, no one should be paying more than they need to for their energy. “
“Britons could face an average £149 price hike if they do not take action and switch to a cheap deal now to avoid rolling onto a poor value standard variable tariff.”
Compare energy tariffs and save by clicking here