Energy bills are set to fall for millions of UK consumers after the industry regulator Ofgem reduced its price cap.
It made the move on standard tariffs to reflect lower costs for energy companies with the yearly energy price cap dropping to £1,179 from October 1st, to run until next March.
Energy price capping was introduced under Theresa May to protect vulnerable people as well as customers who stay with their energy supplier.
Ofgem sets the maximum prices that can be charged for gas and electricity for those on default tariffs. The reduced price cap reflects falling energy market costs that typically make up nearly 50% of the average home energy bill
Its decision means that energy bills for 11 million UK homes will fall by £75 this winter. A further four million households will see a £25 fall in their winter energy bill under a separate cap for pre-paid meters. Pre-payment meter customers will pay a maximum of £1,217.
The UK’s falling gas and electricity market prices have in part balanced out the marginally higher cost of investing in energy networks and renewable energy projects, paid for through bills.
Dermot Nolan, the chief executive of Ofgem, said:
“The price caps require suppliers to pass on any savings to customers when their cost to supply electricity and gas falls.
“This means the energy bills of around 15 million customers on default deals or pre-payment meters will fall this winter to reflect the reduction in cost of the wholesale energy.”
Mark Sait, CEO of SaveMoneyCutCarbon, said:
“A reduction in price caps is great for those that will see smaller energy bills, but it’s key that people remember that the most effective way to keep energy costs low is to be smart with their energy usage”
Reduce energy use
There are easy ways for homes to reduce their energy use to help even further with cutting those bills. Fitting LED lights can reduce electricity usage by up to 90% and will pay for themselves very quickly with savings made.
Then the long-lasting bulbs go on saving you money for many years as they are built to last for a decade or more with standard use. Adding lighting controls can also give you even greater reductions on energy bills.
If you fit an eco shower head and eco taps you can cut your water usage by more than half. By fitting a water-efficient shower head, a family of four could save around £65 a year on gas for water heating, as well as a further £95 on water bills if they have a water meter.
Other top energy saving tips:
- Install a smart thermostat.
- Turn off lights when not needed
- Turn down your thermostat.
- Turn off standby appliances.
- Buy efficient appliances.
- Insulate your home.
Even with the Ofgem move, bills will still be higher than they were in January when the first price cap came into force and consumer groups urge consumers to shop around for better deals that could save them hundreds of pounds. by shopping around for a better deal.
Ofgem will set the cap twice a year for households in England, Wales and Scotland. Northern Ireland has a separate energy regulator with its own price cap.
Mark Sait continued:
“An energy supplier that rewards customers with energy saving products is a no-brainer – especially if they use renewable energy. SaveMoneyCutCarbon, the go-to people for homes and businesses that want to reduce their energy usage, have partnered with Green Star energy to create a unique energy tariff that provides customers with certified renewable energy and free energy saving products that will help you reduce your energy bill – by on average £94 per year”.