Price cap falls but customers can still save more
Lower energy bills to come for millions after price cap falls
Ofgem has reduced the default price cap and pre-payment meter cap by £17, both of which were introduced to protect paying customers from poor value default or standard variable tariffs.
The default price cap (protecting around 11 million households) is set to fall from £1,179 to £1,162 for the April-September period.
The pre-payment meter cap (protecting around 4 million households) is set to fall from £1,217 to £1,200 for the same period as the default price cap.
As wholesale gas and electricity prices are currently at their lowest for around 10 years, it was expected Ofgem would make steeper cuts, so the reduction of £17 is a disappointment for some.
So is my energy bill really set to fall?
Don't let the headlines fool you into thinking you're due to suddenly save money on your energy bill - the fall of the price cap doesn't guarantee this.
If you're on a standard variable tariff or a default tariff, you will notice cheaper bills during the April-September period, but that's as far as it goes. Customers who aren't on an SVT or default tariff will not experience any savings.
It's important to know that the price cap is on unit price too, not on a customers annual energy costs. So the energy cap limits the price a supplier can charge you per kWH of energy, not your total bill, which will still vary depending on how much energy you use.
The real way to save money is to switch to an energy supplier who can offer you a great saving on your actual annual energy bill, and is not just offering cheaper prices because the price cap tells them to.
Source: BBC News