The typical household bill for those who have not signed up to a fixed tariff has dropped by £129 to £1,720 per year when the regulator’s new price cap came into force today (July 1)
Households have been encouraged to submit their meter readings as the energy price cap decreases by seven per cent today. The average household bill for those who haven’t yet committed to a fixed tariff has reduced by £129 to £1,720 annually when the regulator’s new price cap – which determines the maximum amount companies can charge customers per unit of energy – took effect on July 1.
This is £660 (28%) less than during the peak of the energy crisis at the beginning of 2023 when the UK Government introduced the energy price guarantee. However, prices are still high with the forthcoming level being £152 (10%) more than the same period last year.
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The price cap doesn’t restrict the total amount people pay for their energy bills – the more energy consumed, the higher the cost and vice versa.
Providing a meter reading ensures that those who pay via Direct Debit receive an accurate bill next month, rather than an estimate based on usage at the previous rate.
While approximately 35 per cent of domestic customers have actively chosen a fixed deal not subject to the price cap, around 22 million households in Scotland, England, and Wales remain under the energy price cap.
These households should take their meter readings this week to ensure they benefit from the reduced energy prices from 1st July, reports the Daily Record.
Research conducted for comparison website Uswitch indicates that 20% of households without smart meters have not submitted their meter readings in the past three months, with 6% failing to do so for an entire year.
Uswitch estimates that homes on a standard price cap tariff with average usage are projected to spend £63 on energy in July, compared to £113 in June.
This decrease is attributed to a combination of lower unit rates and reduced usage during the summer months.
The company encourages households to take advantage of competitive prices by signing up for a fixed deal. It highlighted that there are currently 10 fixed deals on offer that are cheaper than the July price cap, with the most affordable option saving the average household approximately £145.
Uswitch’s energy spokesperson, Ben Gallizzi, advised: “Customers who don’t have a smart meter should submit their readings before or on Tuesday 1 July, so their supplier has an updated – and accurate – view of their account.”
He added: “There’s a lot of uncertainty about global energy costs at the moment, which has led industry experts to predict a rise in energy bills and in the price cap this autumn.”
Gallizzi further suggested: “But households can get ahead of this possible price hike by fixing at cheaper rates now. Currently, there are a range of fixed deals currently available that are around £145 cheaper than the July price cap for the average household.”
He concluded: “If you can switch to a deal cheaper than the July price cap, now is a good time to make the change. We urge customers to run an energy comparison as soon as possible.”
Ofgem has issued a reminder to households that they needn’t stick with the price cap, asserting “there are better deals out there”.
Emily Seymour, energy expert at Which?, commented on the changes, saying: “Consumers will be relieved that the energy price cap will fall by 7 per cent from 1st July.
“The change to energy prices means that the summer could be a good time to shop around for fixed deals. As a rule of thumb, we’d recommend looking for deals cheaper than the price cap, not longer than 12 months and without significant exit fees.
“If you are on a fixed deal from earlier in the year which leaves you paying more than the July price cap then you might be considering switching early.
“Check whether your contract has exit fees – if yours has no or low fees it could be worth changing to a new tariff. Some contracts charge large fees to leave early, which would cancel out any savings.
“If you’ve not yet fixed a deal and your variable rates are changing from 1 July, submit a meter reading to ensure you pay the cheaper rates for any energy used after the new price cap takes effect.”
