Millions of households will see big savings on winter energy bills

Around 15 million households on default energy tariffs and prepayment meters will benefit from the changes, saving around £84 for default and £95 for prepayment customers

The cap has been set at £1,042 per year for an average households and will be in place for six months until Ofgem reviews it again. It is the lowest the price cap has been.

Ofgem had been tasked with recommending to the Government if the price cap should be kept in place past 2020 based on how competitive the energy market was. The regulator said on Friday that the price cap should stay in place next year.

Ofgem chief executive Jonathan Brearley said: “Millions of households, many of whom face financial hardship due to the Covid-19 crisis, will see big savings on their energy bills this winter when the level of the cap is reduced.

“They can also reduce their energy bills further by shopping around for a better deal. Ofgem will continue to protect consumers in the difficult months ahead as we work with industry and government to build a greener, fairer energy market.”

Richard Neudegg, head of regulation at Uswitch.com, said: “This £84 average fall reduces the default energy price cap to £1,042 for those on standard tariffs - the lowest level it has been since it was introduced in January 2019. For those with prepayment meters, the average fall is £95.

“Wholesale energy prices plunged earlier this year following COVID-19 lockdown measures, and this passes some of that reduction onto the energy bills of millions of households who are on Standard Variable Tariffs.

“There is a £232 difference between the new October level of the price cap and the cheapest fixed deal on the market now, so there is still a lot of money to be saved by moving off a default tariff.

“With Ofgem already saying that the cap may need to rise in April if wholesale trends continue, locking in a 12-month fixed deal is looking like an even smarter choice for consumers.

“Many people will be relieved to see their energy prices fall as temperatures start to drop, and this change will take some of the sting out of expensive winter bills.

“However, savvier consumers will note that a change in October represents a seven month lag since the huge plunge in wholesale prices at the start of the lockdown - an unavoidable fallout of the price cap system.

“This summer has seen energy deals at their cheapest since 2018 and millions are already benefiting from the lower wholesale prices.

“This price cap cut is effectively money off what are the most expensive tariffs in the market. Customers can choose to stay on their energy deal and wait until October to see the cut, or they can reap the benefits of these low prices today by switching.

Editor’s note: first and foremost - and rarely have I written down these words with more sincerity - I hope this finds you well.

Almost certainly you are here because you value the quality and the integrity of the journalism produced by The Yorkshire Post’s journalists - almost all of which live alongside you in Yorkshire, spending the wages they earn with Yorkshire businesses - who last year took this title to the industry watchdog’s Most Trusted Newspaper in Britain accolade.

And that is why I must make an urgent request of you: as advertising revenue declines, your support becomes evermore crucial to the maintenance of the journalistic standards expected of The Yorkshire Post. If you can, safely, please buy a paper or take up a subscription. We want to continue to make you proud of Yorkshire’s National Newspaper but we are going to need your help.

Postal subscription copies can be ordered by calling 0330 4030066 or by emailing [email protected]. Vouchers, to be exchanged at retail sales outlets - our newsagents need you, too - can be subscribed to by contacting subscriptions on 0330 1235950 or by visiting www.localsubsplus.co.uk where you should select The Yorkshire Post from the list of titles available.

If you want to help right now, download our tablet app from the App / Play Stores. Every contribution you make helps to provide this county with the best regional journalism in the country.

Sincerely. Thank you.

James Mitchinson

Editor