MILLIONS of households will save £17 a year on their energy bills after Ofgem announced plans to lower the 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 now.
The default energy price gap is set to fall by £17 from April[/caption]
The default price cap, which affects around 11 million homes on standard variable tariffs (SVR), is set to fall from £1,179 to £1,162.
The pre-payment meter cap, which will benefit a further 4 million households, will fall from £1,217 to £1,200.
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 put the reduction down to wholesale energy prices continuing to fall between August 2019 and January 2020.
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The price cap on energy bills was introduced by Theresa may back in January last year and set at £1,137.
During 2019, households protected by the default price cap are estimated to have saved £1 billion 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 15 million 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.
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