MILLIONS of households will save £17 a year on their energy bills after energy regulator Ofgem announced plans to lower its price cap.
The cap is a limit on how much suppliers can charge for electricity and gas – but customers could save even more on their bills by shopping around.
1
The default price cap, which covers around 11million homes on standard variable tariffs (SVRs), is set to fall from £1,179 a year to £1,162 a year.
And the separate pre-payment meter cap, which will benefit a further 4million households, will fall from £1,217 a year to £1,200 a year.
As a result, around 41 suppliers will now have to lower prices – but bill payers will have to wait until April 1 before the price drop comes into force.
Ofgem says the reduction is as a result of wholesale energy prices continuing to fall between August 2019 and January 2020.
How to save £268 on your energy bills (Sponsored)
AVOID energy price rises this winter with Switchcraft.
Why is it important to switch suppliers regularly?
Energy suppliers save the best deals to attract new customers, while moving existing customers to higher rates.
Switchcraft lets you know every time you can save money by switching.
- Sign up in 3 minutes and get instant energy quotes.
- Let Switchcraft find you better deals every year, saving you time and money.
- Get £5 free cashback or an Amazon voucher* when you sign up between 9 December 2019 and 2 March 2020.
The £5 will be paid into your bank account within 120 days of completing the switch. *Prepayment meter customers will receive a £5 Amazon voucher. Open to those 18 and over. UK residents only. Click here for full T&Cs. News Group Newspapers Limited has a brand partnership with Switchcraft.
The price cap on energy bills was first introduced by former Prime Minister Theresa May, back in January last year and was initially set at £1,137.
During 2019, households protected by the default price cap are estimated to have saved £1billion on their energy bills.
Jonathan Brearley, chief executive at Ofgem, said: “The default price cap is designed to protect consumers who do not switch from overpaying for their energy, whilst encouraging competition in the retail market.
“Today’s announcement is further good news for the 15million households covered by both price caps who will see their energy bills fall in April.”
How to find a cheaper energy deal
FIRSTLY, you’ll need to have a recent bill to hand. This will have all the details you need, including the name of your tariff and your recent spending on gas
- Use a comparison website: Customers can use websites such as uSwitch.com or Energyhelpline.com to compare tariffs and find a cheaper deal. You could save up to £400 a year if you’ve never switched before.
- There are other service you can turn to: MoneySavingExpert’s Cheap Energy Club will let you set up an email reminder that alerts you when cheaper deals become available.
- Things to do before you switch: Compare prices and before you switch check to see if you can get cachback from a website like Quidco or TopCashback
While millions of households are set to benefit from the cap, they could save even more by switching supplier.
In fact, Ofgem says switching from a default tariff to a cheaper deal could save a typical household up to £305.
Alex Dickson, head of research at Switchcraft.co.uk, says: “If consumers think the cap will protect them from paying over the odds for energy, they are sadly mistaken.
“The gap between the default price cap and market leading energy deals is as wide as it’s ever been.”
To see if you can slash your energy bills, use a comparison site to find the cheapest deal for you.
It takes minutes to do and you could save hundreds of pounds, as the cheapest tariffs are only available through these sites.
You’ll need to fill in your name, address and who your existing provider is.
According to Uswitch, the cheapest fixed-rate deal currently on the market is by Utility Point, which charges an average of £785 for a 12-month plan.
If you’re on a pre-payment metre, the best fixed-rate deal is by Bulb, where you’ll pay an average of £1,068 over 12 months.
MoneySavingExpert founder Martin Lewis recently warned how 11million households are overpaying on energy bills.
Three energy companies will pay £10.5million after one million people were left without power last August.
However, back in October, ministers warned how homes without smart meters face a massive energy bill hike.
