Energy bills to fall by around £10 a month from April
The energy price cap, which limits the amount customers on standard variable tariffs pay for each unit of gas and electricity, will fall by 7% from April, taking average annual bills from £1,758 to £1,641 for a typical household.
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This means that the headline energy price cap has fallen by just over 10% since December 2023. Lower energy prices are being driven by falling wholesale prices, and the government’s Budget decision to cut £150 in policy costs from bills.
However, Peter Tutton, Director of Policy, Public Affairs, and Research at debt charity StepChange, said: “Whilst a reduction in the price cap may give people pause for a welcome sigh of relief, the reality is that energy debt and energy bills are still placing significant pressures on households across Britain. People spend huge proportions of their income heating their home and keeping the lights on - as our advisers hear every day that people are struggling to cope with the cost of energy.”
It’s important to remember that the energy price cap is the maximum amount energy suppliers can charge you for each unit of energy and standing charge, but it does not mean that your overall cost is strictly capped at £1,641. For example, if you live in a larger property, your annual bills may well be higher than the cap, while they may be lower if you live in a small property that costs less to heat.
Danni Hewson, AJ Bell head of financial analysis, said: “It’s those who use the most power that will save the most from the changes. Some households will get savings of more than £150 a year, in particular people operating medical equipment or with other high electricity usage needs.”
Check your tariff
Even though energy costs are set to fall in April, it’s still vital to check you’re on the most competitive energy tariff possible. You can do this using a comparison website such as MoneySuperMarket, Go Compare or Compare the Market.
Alastair Douglas, chief executive at TotallyMoney, said: “The energy market punishes loyalty, and most households are paying the maximum their supplier is allowed to charge. You could save up to £917 per year on your bills just by switching, and changing suppliers is easy, with most taking place in just five working days. All your plugs and pipes stay the same, and nobody needs to visit your home to make it happen.
“If switching, make sure to watch out for early exit fees – because if you’re already tied into a deal, you might be charged if you leave. These can cost around £50 per fuel – so £100 in total. But, if you’re in the last 49 days of your contract, you won’t be charged. And if you’ve not switched for a year, there’s a good chance you’re free to move.”
If you’ve recently locked into a fixed price tariff, suppliers have confirmed that the savings from the lower price cap will be passed on in full to customers.
This means if you are already on a fixed price tariff on 1 April, your tariff will be amended so that savings are applied to your unit rates going forward. Your energy supplier should contact you in coming weeks to confirm your new rates.