Householders can save cash by sending meter readings to their energy provider ahead of the reduced price cap, set to come into force on July 1. It follows Ofgem's decision to drop the price cap in response to plummeting wholesale prices, resulting in an average annual decrease of £426 in household energy bills from July.
The energy regulator has declared that it will slash the price cap from £3,280 to £2,074, commencing July 1. This marks the first occasion since the global gas crisis gripped the market over 18 months ago that consumers on default tariffs will witness a decline in their prices.
The government's Energy Price Guarantee (EPG) has partially shielded households from recent price hikes by limiting the average annual energy costs to £2,500. This EPG subsidy has effectively supported Ofgem's price cap. Consequently, Ofgem's latest reduction will once again govern household bills, resulting in a drop from £2,500 to £2,074, equating to approximately a 17% decrease.
To ensure that they benefit from the reduced prices as soon as they take effect, consumers are advised to submit their meter readings before midnight on June 30. By providing accurate readings, households can prevent their supplier from estimating their energy usage and potentially applying the old, higher prices to post-June 30 consumption.
In the event that you are unable to submit their readings by June 30, they are encouraged to do so as close to the date as possible, while retaining a date-stamped photograph as proof.
Gareth Kloet, energy spokesperson at the Go Compare deal comparison site, said: "This drop will come as a very welcome relief for many households who have been struggling to pay their energy bills in the past year. If you compare energy prices with winter 2021 – when the price cap was set at £1,277 – the past 12 months have been a huge struggle for many, so this weekend’s drop is definitely a step in the right direction. However, it’s important that you take a meter reading so that you can make the most of the price drop."
He added: "By taking a meter reading on June 30, before the price drop comes into force, it will mean that your energy company cannot charge you at the higher rate for any units that have been used after that date."
Simon Francis, coordinator of the End Fuel Poverty Coalition, said: "As the new price cap comes in for most households, customers are still going to be paying roughly the same for their energy as they did last winter. And after months of inflation and the wider cost of living crisis, people are even less able to afford these high energy bills."
Francis said: "The Government needs to use the summer to fix Britain’s broken energy system because for millions of people, the energy bills crisis is far from over. This means ramping up energy efficiency programmes, introducing a Help To Repay scheme to deal with the record levels of public energy debt, and reforming energy pricing arrangements so that the benefits of cheap renewable energy are passed onto households."
What is the UK energy price cap?
The price cap was introduced in 2019 as a measure to protect consumers who were on default or standard variable tariffs from paying excessive energy prices.
The energy price cap allows Ofgem to set a maximum limit on the unit rate that energy suppliers can charge for electricity and gas. It also includes a cap on standing charges. The cap is reviewed twice a year, in April and October, and it can vary depending on factors such as wholesale energy costs, network charges, and policy costs.
*You may notice the below message on a small number of Manchester Evening News articles. We like to innovate and this is part of a trial to look at whether AI can help speed up the publishing process, We will always declare where this happens.
This article was crafted with the help of AI tools, which speed up the MEN's editorial research. A Manchester Evening News editor reviewed this content before it was published. You can report any errors to newsdesk@men-news.co.uk*
