The energy price cap, which determines the maximum amount households can be charged for their energy bills, is expected to decrease by 9% in July, according to recent predictions made by industry analysts at Cornwall Insight. This decrease would bring the average energy bill for a typical dual-fuel household down to £1,683 per year, resulting in a savings of £166 compared to the current cap of £1,849. However, experts are warning that this decrease may not be a permanent solution, and households can potentially save even more by switching to a fixed deal. For instance, customers of British Gas, OVO, EDF, EON, and Ovo are being urged to take action to save up to £258 on their energy bills by opting for alternative deals.
The energy price cap was introduced in January 2019 by the regulator Ofgem, with the goal of protecting households on expensive variable tariffs from being overcharged. The cap has been adjusted several times since its introduction, with the most recent increase occurring in April, when it rose by 6% to £1,849 per year for a typical dual-fuel household paying by Direct Debit. However, with the latest forecast suggesting a decrease in the cap, households may be breathing a sigh of relief. Nevertheless, experts are cautioning that the energy market is highly volatile, and any decrease in prices may not be sustained. Dr. Craig Lowrey, principal consultant at Cornwall Insight, emphasized that there is always a risk of the market rebounding, and households should be prepared for potential future increases.
Despite the potential decrease in the energy price cap, experts are encouraging households to explore alternative options to save even more on their energy bills. Elise Melville from Uswitch noted that a summer-time fall in the price cap may provide some relief for under-pressure households, but the forecasted reduction is relatively small compared to the savings available by switching to a fixed deal. According to Uswitch, the average household on a standard tariff could save around £258 per year by switching to a cheaper fixed deal, which beats the latest July prediction. This highlights the importance of shopping around and exploring different options to find the best deal for individual households.
The cheapest energy-only dual-fuel tariff currently available is Outfox the Market’s Outfox the Price Cap (Apr 25) 12M Fix’d Dual v3.0, which offers an average annual bill of £1,591, resulting in a £258 saving compared to the current price cap. This deal, along with other similar fixed-rate plans, can provide households with a more stable and predictable energy bill, shielding them from potential future price increases. By taking advantage of these deals, households can not only save money but also gain more control over their energy expenses. Furthermore, with the energy market constantly evolving, it is essential for households to stay informed and adapt to changes to ensure they are getting the best possible deal.
It is worth noting that the energy price cap is not a fixed rate, but rather a maximum amount that households can be charged. As a result, energy suppliers are free to charge lower rates if they choose to do so. This means that households may be able to find even better deals by shopping around and comparing prices. Additionally, some energy suppliers may offer additional incentives, such as discounts or rewards, to attract new customers or retain existing ones. By taking the time to research and compare different options, households can make informed decisions about their energy suppliers and potentially save even more money.
In conclusion, while the predicted decrease in the energy price cap may provide some relief for households, it is essential to remember that the energy market is volatile, and any decrease in prices may not be sustained. By exploring alternative options, such as fixed deals, and shopping around for the best rates, households can potentially save even more on their energy bills. With the average household on a standard tariff potentially throwing money away by not switching, it is crucial for households to take control of their energy expenses and make informed decisions about their energy suppliers. By doing so, households can not only save money but also gain more control over their energy costs and reduce their financial burden.
