Energy bills ‘to fall’ for millions of households in WEEKS say experts – how you can save now
MILLIONS of households will soon breathe a sigh of relief as energy bills are predicted to fall again in July.
Analysts at Cornwall Insight said the average gas and electricity bill will fall to £1,720 from July, representing a drop of 7% on April’s price cap.
If the final forecast is correct, it would reduce the average customer’s bill by £129.
However, it would still be £37 higher than earlier predictions from experts.
Nevertheless, the savings will still provide relief to millions, as over 22million households on standard variable tariffs are directly affected by the price cap, which is updated every three months.
Dr Craig Lowrey, principal at consultant at Cornwall Insight, said: “The fall in the price cap is a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs.
“It’s a step in the right direction, but it should be taken in context.
“Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade.
“As such, there remains a risk that energy will remain unaffordable for many.”
Currently, the price cap sets annual energy costs at around £1,849.
However, many households may still pay more than Ofgem‘s headline figure.
This is because the price cap doesn’t cap total bills but limits the maximum cost per kilowatt-hour (kWh) of gas and electricity, along with daily standing charges.
Ofgem’s headline figure is based on the assumption that a typical household consumes 2,700 kWh of electricity and 11,500 kWh of gas annually.
So if you use more than a typical households expect to pay more.
However, energy experts suggest that households could make significant savings by switching to a fixed-rate energy deal now.
Richard Neudegg, director of regulation at Uswitch.com, said: “The expectation of a drop in July’s price cap is welcome news.
“But any household still on the standard variable tariff should ditch it well before then.
“There are a number of fixed deals on the market already cheaper than the predicted July rates, and we’re seeing the biggest savings versus the price cap since autumn 2020.
“The average household on a standard tariff could save around £332 a year by switching compared with the current price cap, which also beats the latest July prediction by around £200 per year.”
By choosing a fixed deal, customers can lock in consistent rates for a set period, potentially avoiding fluctuations in energy prices.
Of course, opting for a fixed energy deal carries the risk that, if energy prices drop further, you might end up paying more than you would on a variable tariff.
However, analysts have long said that households should not anticipate any significant drops in prices this year.
Outfox the Market is currently offering the cheapest fixed energy deal on the market.
Its Fix’d Dual May25 12M v5.0 tariff, costs a typical household £1,517 a year.
This means it is £332 cheaper than Ofgem‘s April price cap and £203 a cheaper than the predicted cap for July.
It comes with a £50 exit fee per fuel or £100 if you lock in with a dual fuel tariff.
How can I find the cheapest fixed deals?
To find the best fixed energy deals, start by visiting price comparison websites, which aggregate various offers from different energy suppliers.
The best sites include Uswitch.com and MoneySavingExpert’s Cheap Energy Club.
Enter your postcode and current energy usage details to receive a list of available deals tailored to your needs – it’ll take you less than five minutes.
You’ll then be able to compare the rates, contract lengths, and any additional features or benefits offered by each deal.
Next, visit the websites of individual energy suppliers to check if they have exclusive deals that are not listed on comparison sites.
Sometimes, suppliers offer special promotions or discounts directly to customers.
Compare these offers with those on the comparison websites to ensure you get the best possible rate.
Finally, consider customer service reviews and the overall reputation of the suppliers.
Once you have identified the best deal, follow the instructions to switch your energy provider.
What energy bill help is available?
There's a number of different ways to get help paying your energy bills if you're struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don’t think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have schemes available to customers struggling to cover their bills.
But eligibility criteria vary depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £2,000.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don’t need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill.
Some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you’re struggling.
Get in touch with your energy firm to see if you can apply.