Huge energy bill drop for millions from Tuesday - but you need to do one thing

Yahoo

4 hours ago

Households are being encouraged to submit their meter readings before the energy price cap drops by 7 per cent on Tuesday.
The average household bill for those not yet on a fixed tariff will decrease by £129 to £1,720 per year when the new price cap from Ofgem, which sets the maximum amount companies can charge customers per unit of energy, takes effect.
This is £660 (28%) less than at the peak of the energy crisis at the beginning of 2023 when the government introduced the energy price guarantee. However, prices remain high with the forthcoming level £152 (10%) more than the same period last year.
The price cap does not limit total bills as households still pay for the amount of energy they use. While about 35 per cent of domestic customers have now actively chosen a fixed deal, which is not subject to the price cap, roughly 22 million households in England, Wales, and Scotland are still on the energy price cap.
These households should read their meter by the end of the month to ensure they fully benefit from lower energy prices from July 1. Failure to do so risks paying the higher pre-July 1 rate for energy used in the form of estimated bills.
READ MORE: MPs to debate over 60s getting free bus pass in England after major breakthrough
READ MORE: Martin Lewis issues advice to anyone changing money ahead of going on holiday this summer
Research for comparison site Uswitch indicates that one fifth of households without smart meters have not submitted their meter readings in the last three months, and 6 per cent have not done so for an entire year.
Uswitch has revealed that average energy costs for homes on a standard price cap tariff are set to drop from £113 in June to £63 in July, attributing the decrease to lower summer usage and reduced unit rates.
The comparison site is encouraging consumers to lock into fixed deals while prices are favourable, highlighting that there are currently 10 fixed tariffs available that undercut the July price cap, with the most economical option offering savings of about £145 for the typical household.
Uswitch's energy expert Ben Gallizzi 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."
He also warned of potential increases in energy bills and the price cap this autumn due to global market uncertainties, advising: "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."
Gallizzi urged customers to consider switching soon: "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."
Additionally, Ofgem has reminded the public that they are not obliged to stick with the price cap, stating "there are better deals out there".
The drop in energy prices is set to provide some respite for households that endured an "awful April" with bill increases, including Ofgem's previous 6.4 per cent price cap hike.
Families under financial strain have also faced the largest water bill increase since at least February 1988, as well as significant hikes in council tax, mobile and broadband tariffs, and road tax.