Prices that most of us pay for gas and electricity will fall by 6.7% on average from the start of April.
Housing Plus Group’s debt and energy manager Dan Bebbington talks us through the details.
This is the first time since last summer that energy bills will have fallen, and will result in a saving of £117 annually – around £10 per month – for those using a typical amount of gas and electricity.
Energy regulator Ofgem yesterday confirmed that the energy price cap – the maximum amount most people can be charged per unit of gas and electricity on a standard tariff – will reduce by 6.7% for the average household. In real terms, this works out as an annual bill reduction of £117 to £1,641.
It comes following the Government’s previous Autumn Budget, where Chancellor Rachel Reeves announced changes to cut certain energy-related levies off consumer bills and instead, into general taxation.
Although this announcement brings some welcome breathing space for many of us, it is important to remember that your discount will depend on the size and type of your household, and its energy usage.
To understand how your bill will change, you’ll need to look at new standing charges and unit prices, for electricity and gas – and compare this to your typical usage. There are online calculators that can work this out for you.
In addition to the reduction in energy bills from April, standing charges are also set to fall, with the Government announcing earlier this month that it would cut the cost of standing charges by moving costs associated with the Warm Home Discount and on to energy unit rates instead.
Standing charges – which is a fixed daily amount that you pay on your energy bill, even if you don’t use any – currently stand at around £328 of the average annual energy bill. From April, this will fall slightly to £315.
It is also worth noting that you can save 14% compared to the current price cap by fixing – and fixing gives you certainty over what you’ll be paying, rather than waiting to see what the price cap does each quarter.
However, with that said – most fixes are expected to fall by a similar amount to the price cap from April, as the energy savings announced in the Autumn Budget are expected to be passed on to fixes too, meaning the current level of savings you will see are likely to be around the same (or even a little higher) come April.
You can visit moneysavingexpert.com for up-to-date information, as well as comparison sites such as GoCompare and Uswitch are also useful for finding deals that best work for you.
If you are concerned about your energy bills or usage, speak to your energy supplier or a charity such as Marches Energy Agency, LEAP (Local Energy Advice Partners) and National Energy Action.
Housing Plus Group’s customers can also contact our dedicated Energy Advisor, in partnership with the Cadent Foundation, for advice and support.