British Gas, EDF, EON and Octopus customers urged to act before July for £332 boost | Personal Finance | Finance

British Gas, EDF, E.ON and Octopus Energy customers are being urged to act before July for a £332 boost on their energy bills over the next 12 months. Price comparison website Uswitch is urging households who aren’t currently on a fixed tariff to switch to one before the energy price cap changes in July to make hundreds of pounds worth of savings over the course of the deal.

Energy regulator Ofgem sets the price cap four times per year and this dictates the maximum amount that energy suppliers can charge consumers in England, Scotland and Wales for each unit of energy and standing charge. The cap is reviewed and changed every three months, with new rates taking effect in January, April, July and October. The amount rates are set at is largely determined by the wholesale costs facing suppliers for providing energy.

The cap was increased by 6.4% in April to take the average bill for households on standard variable tariffs up from £1,738 per year to £1,849. The hike equates to an extra £111 annually for the average household – or around £9.25 more per month, over the three-month period of the price cap.

But the cap only sets the maximum rate per unit and standing charge that customers can be charged by suppliers for their energy use, not the total bill – so the more energy you use, the more you pay.

However, not all households are subject to the price cap as it is only paid by those who aren’t currently on a fixed tariff, so if you switch it’s possible to undercut the price cap significantly.

Experts at Cornwall Insight have predicted that household energy bills are set to fall by around 7% (£129) in July, dropping from the current rate of £1,849 per year down to £1,720.

But despite the predicted fall, Uswitch says households could make bigger savings of around £332 on average by switching to a fixed energy deal before July, as there are some that are £200 cheaper than the forecast price cap rate for July.

Uswitch says the cheapest current energy-only dual-fuel tariff is Outfox the Market’s Fix’d Dual May25 12M v5.0 tariff, with an average annual bill of £1,517, fixed for 12 months. It means that British Gas, EDF, E.ON and Octopus Energy customers who switch to this deal could make a saving of £203 against the predicted price cap for July.

Richard Neudegg, director of regulation at Uswitch.com, said: “The expectation of a drop in July’s price cap is welcome news. But any household still on the standard variable tariff should ditch it well before then.

“There are a number of fixed deals on the market already cheaper than the predicted July rates, and we’re seeing the biggest savings versus the price cap since autumn 2020.

“The average household on a standard tariff could save around £332 a year by switching compared with the current price cap, which also beats the latest July prediction by around £200 per year.

“Now is the time to go online to see what deals are available to you. If you can beat the predicted July rates then switching now could be a no-brainer.”