Many of us could see our energy bills fall by £10 a month in July, after the latest price cap was announced.
The new energy price cap, which is effective from July 1st until the end of September, is a 7% reduction on the current one – but still higher than the same time last year.
It affects those who are on price-capped tariffs (as opposed to fixed deals), which is thought to be about two thirds of UK households.
If you’re not in a fixed deal currently, it means your bills should reduce over the summer.
The £10 monthly average saving is based on an average household with typical energy usage, paying by direct debit on a dual fuel tariff (where gas and electricity are paid for together).
However your actual bills will always be dependent on your household’s energy use. Those who have pre-pay meters or pay on receipt of a bill will also pay differing amounts.
To understand how your actual bill will change, you’ll need to look at the new standing charges and unit prices, for electricity and gas, and compare this to your usage. There are online calculators that can work this out for you.
While few people were on price-capped tariffs a few years ago, the energy crisis put a stop to any better deals from suppliers and so almost everyone ended up on the price cap when their contracts expired. Now, many people are still on price-capped tariffs, despite the fact that better deals are now being offered again.
It’s a great time to explore current deals and consider fixing. Not only will you likely save money, you’ll also have certainty in knowing what your monthly bills will be rather than waiting for the new price cap to be announced each quarter.
Deals change regularly but there are currently offers from suppliers including Eon, EDF and Outfox the Market which substantially undercut the current and new price caps.
Many suppliers also offer cashback or refer-a-friend incentives which increase your overall saving.
Switching suppliers is a straightforward process and your energy supply won’t be interrupted.
Many people are also put off switching by the worry that they’d be stuck paying more if the price cap were to fall. But although we don’t know exactly what will happen to the price cap each quarter, we’re not expecting any dramatic drops, so fixing is almost certain to save you money overall.
Aside from fixed tariffs, there are other deals which fluctuate but guarantee to stay below the price cap, as well as ‘tracker’ tariffs which go up and down with wholesale energy prices.
You can check moneysavingexpert.com for up-to-date information on what deals are available at the moment, and comparison sites like GoCompare and Uswitch are also handy for finding the one that works best for your circumstances.
If you’re concerned about your energy bills or usage, contact your energy supplier or a charity such as Marches Energy Agency, LEAP (Local Energy Advice Partners) or National Energy Action.
Homes Plus customers can also speak to our dedicated team, for confidential money advice. Please be aware that there is currently a waiting list for this support.