Households have been encouraged to submit their meter readings before the energy price cap decreases by 7 per cent tomorrow (Tuesday, July 1). The average household bill for those who haven’t yet opted for a fixed tariff will fall by £129 to £1,720 annually when the regulator’s new price cap – which sets the limit on how much companies can charge customers per unit of energy – comes into effect.
This is £660 (28 per cent) lower than at 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 upcoming level £152 (10 per cent) higher than the same period last year.
The price cap doesn’t limit the total amount people pay for their energy bills – the more you use, the more you pay and vice versa. Providing a meter reading ensures that people who pay by Direct Debit receive an accurate bill next month, not an estimate based on usage at the previous rate.
While about 35 per cent of domestic customers have now signed up to a fixed deal that they have actively chosen – and which isn’t governed by the price cap – roughly 22 million households in Scotland, England and Wales are still on the energy price cap.
It’s these households that should read their meter this week to ensure they benefit from lower energy prices from 1 July, reports the Daily Record.
Research from Uswitch indicates that 20 per cent of households without smart meters have neglected to submit their meter readings in the past three months, with 6 per cent failing to do so for an entire year. Uswitch has found that homes on a standard price cap tariff with average consumption are set to spend £63 on energy in July, down from £113 in June, due to lower unit rates and reduced summer usage.
The comparison site is encouraging consumers to lock into fixed deals while prices are still competitive, highlighting that there are currently 10 fixed deals available that undercut the July price cap, with the cheapest offering average savings of about £145.
Ben Gallizzi, Uswitch energy spokesperson, commented: “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. 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 added: “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. 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 pointed out that households aren’t bound by the price cap, suggesting that “there are better deals out there”. Which? Energy Editor, Emily Seymour, said: “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.”
She added: “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.”
She also advised: “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 comes into effect.”
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