What July’s new energy price cap means for you
Despite energy bills falling by 17% in a fortnight, many people will still be paying more than they did last winter, so it’s worth exploring ways to reduce your costs.
The new energy price cap comes into effect from July 1, meaning average annual energy bills for a typical household will be capped at £2,074, down from the current energy price guarantee of £2,500. The price guarantee provides a set discount on Ofgem’s price cap until the end of June, but will be removed at that point, as we always pay the lower of the price cap or the guarantee. Bear in mind that the cap only gives an indication of the maximum amount the average household using a “typical” amount of energy would pay each year. If, for example, you have a big house or use a lot of energy each year, you will pay more than this, and if you live in a small property and use limited energy, you’ll pay less.
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The reason many will be forking out more than they did in winter, despite the lower price cap, is that the UK government has now ended the £400 energy bill support scheme for every household. This cut £66 or £67 off bills every month for a six-month period. The government does still offer cost of living payments to those on certain means-tested benefits.
Even though the energy price cap is reducing, with so many other costs still rising, and another increase in the Bank of England base rate expected next Thursday (June 22) it still pays to look at ways you might be able to keep bills down.
For example, some energy suppliers, including E.on and Ovo Energy, in recent weeks have introduced new fixed energy tariffs for their existing customers only. If you’re offered a deal that’s lower than the price cap by your supplier, it may be worth considering, especially if you want peace of mind that the price you pay for energy won’t suddenly fluctuate.
Only one provider, So Energy, is currently offering a fixed tariff for new customers too via comparison sites Uswitch.com and Confused.com, but don’t hang around if you’re interested as it’s only available to a limited number for a limited period of time. Annual costs on this tariff, assuming a household has typical gas and electricity use, would be £2,047. It’s hoped that more suppliers will introduce fixed tariffs for new customers in coming weeks.
Ways to conserve energy
If you can’t switch to a cheaper tariff, you may want to see if there any changes you might be able to make at home to lower your energy bills.
Steve Buckley, head of data science at the smart meter app Loop, said: “There are lots of ways you can reduce your bills: from turning off appliances to reduce your ‘Phantom Load’, to reducing your boiler flow temperature and reducing your thermostat by a couple of degrees, to making sure you’ve swapped all your bulbs for super-efficient LEDs.”
Other tips to conserve energy this summer include making sure you don’t leave electrical appliances on standby, and investing in more energy efficient appliances if you need to replace any appliances that no longer work.
David Johnson, technical and category manager at the Underfloor Heating Store, said that there are several simple steps we can take in the kitchen in particular to conserve energy. He said: “Use the correct size cooktop burner - by using the correct-sized hob ring for your pot, you can save around 4-5% of energy consumption when cooking.”
He also suggested cleaning your kettle with white wine vinegar as this can save around 0.5% -1% of energy consumption annually, as well as helping to prolong the life of your kettle.