Energy bills fell by about £238 a year from April for a household using a typical amount of gas and electricity, following the introduction of the latest energy price cap.
This brings the average annual bill down by 12.3% to £1,690, and marks the lowest energy price cap for more than two years, with the average bill falling by £293 a year.
Ofgem, said that energy bills for the average household have fallen by £690 since Russia’s invasion of Ukraine in February 2022. This caused a spike in wholesale energy prices, driving up costs for both suppliers and customers.
In recent months providers have finally started to launch more competitive price energy deals, which vanished from the market amid the energy crisis. However, many of these tariffs are only available to existing customers and only offer small discounts on the energy price cap.
If you’re considering switching your energy provider, it’s worth doing plenty of research so you can be certain you’ve found the best possible deal to suit your needs. Comparison websites such as MoneySuperMarket, Uswitch and Compare the Market enable you to compare the latest energy tariffs, whether you’re looking for a fixed or variable deal.
Craig Lowrey, principal consultant at Cornwall Insight, said: “Fairly healthy gas supply across the Atlantic, coupled with high storage levels in Europe, are helping to keep bills down. But we mustn’t get too complacent. Our energy system is still walking a tightrope, and we cannot be sure another political or economic crisis won’t send bills straight back up.”
Here we answer your questions about your options when it comes to energy tariffs. We’ll regularly update this as the news around energy costs changes and it becomes possible to switch to a cheaper tariff.
Which tariff are you on?
If you’re considering moving to a different energy tariff, your first step should be to establish which tariff you’re currently on. You’ll usually be on a variable tariff, the cost of which is determined by the price cap, if your fixed energy tariff has ended and you haven’t switched to another deal, or if you’ve never switched your energy tariff, or if you were with a supplier that’s gone bust and you’ve been moved to another provider. The majority of UK households are currently on the energy price cap guarantee.
The cap gives an estimate of the maximum amount per year that an average household using a ‘typical’ amount of energy will pay. However, it’s by no means a limit, as if you live in a large property, or use a lot of energy, you’ll pay more than this. Read more in our article What is the energy price cap?
What if you’re locked into a fix?
If you’ve locked into a fixed rate energy tariff at a higher rate than the energy price cap due to energy price rises, it’s worth seeing whether there are any exit fees to leave your current deal. If there aren’t, they are relatively low, or it’s due to finish soon anyway, you may find you’re better moving onto your provider’s default tariff, unless cheaper tariffs become available.
If you’re on a fix that costs less than the energy price cap, you’ll continue on this until your fixed term ends. When your fix ends, see if it’s possible to switch your tariff when prices start to come down.
What are the cheapest energy deals?
Default tariffs are still likely to be the cheapest overall option for households over the coming months, unless your supplier offers a fixed or discounted tariff to existing customers that’s significantly lower than the price cap. In the past, you’d always shop around for another competitive fixed rate tariff to move onto, as these lock in the unit rates and standing charges of your gas and electricity for a certain period of time.
Should I move to a fixed or discounted deal?
As mentioned, there are some fixed and discounted deals available from some energy suppliers. According to MoneySavingExpert, unless you can fix at 3% less than the current price cap, it’s predicted that you’ll pay more than staying on the price cap.
It’s also worth contacting your particular energy supplier and asking if there are any deals they are offering that might be worth considering. Here are a few deals that are currently available but bear in mind that these are frequently changing:
The tariff that’s most likely to be worth considering is E.on Next’s Next Pledge, which is available to new and existing customers. You must be happy to have a smart meter installed or already have one in place to qualify for this deal. The tariff isn’t a fix, as it stands at 3% less than every price cap for a 12-month term (so it moves in line with the price cap, which is reviewed every three months) with £50 dual-fuel exit fees. The price changes each quarter in line with the price cap changes.
Another is EDF Energy’s Essentials one-year May 25 fixed at 7% less than the current price cap, with £50 dual-fuel exit fees. It’s available for new and existing customers, and the cheapest fixed-rate deal on the market at present. You must have a smart meter installed to be eligible for this deal.
Outfox the Market is offering a Super Fix’d Dual April 2024 tariff for new and existing customers. It’s 6% less than the current price cap, and the tariff comes with £50 dual-fuel exit fees.
British Gas is offering a Fixed Lighter 12m v2 / Fixed Tariff 12M v3 to new and existing customers. It’s 5%less than the existing price cap and you don’t need to have a smart meter to benefit. British Gas is also offering half price electricity until 8 September on Sundays to some eligible customers. This deal has £100 dual fuel exit fees.
E.on Next is offering the Next Fixed 12m v14 / Gust v5 fixed tariff for new and existing customers, but you must be prepared to have a smart meter installed..
There are other fixed and discounted tariffs available, but they don’t necessarily offer a decent enough discount on the price cap to be worth considering, or come with onerous conditions attached. Keep an eye on your provider’s tariffs to see if any come up that are worth considering.
Figures were correct at time of writing (02.05.2024)
What can you do if you’re struggling to pay your energy bills?
It’s an extremely tough time for households battling rising costs across the board, from energy to food and other general utilities. As a first step, it’s worth contacting your energy provider if you’re struggling and slipping into the red. They may be able to help with a payment plan, or make other suggestions. Read more in our article What can you do if you can’t pay your energy bills?
If you were born on or before 26 September 1955, check if you’re entitled to the Winter Fuel payment. This is a tax-free amount of between £100 and £300 to help pay your heating bills over winter, and the amount you receive depends on your age and anyone else in your household.
The government will also give an extra £300 to those receiving the Winter Fuel payment, with a further £150 payment to those receiving disability benefits.
Alternatively, you may be able to get money off under the Warm Home Discount Scheme, which is a one-off £140 discount on your electricity bill paid to your supplier between September and March. Find out more in our guide Are you eligible for help with heating costs?
If your home is poorly insulated, you may be able to make improvements through installing insulation. You can find tips on how to reduce your energy bills in our article Energy saving tips: how to reduce your bills.
It’s also well worth checking whether you might be able to reduce some of your other outgoings, so you can free up a bit of extra cash to help you cover rising energy costs. Our article Seven ways to save on your household bills explains how you may be able to make savings.
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