Good news with cheaper energy prices next month

It’s powerful news for households as a typical energy bill will fall by £11 a month from next month because of a fall in the international price of wholesale gas.

“This is really encouraging after households were hit by a series of bill hikes for energy, water and council tax at the start of April,” said Midlands green energy expert Ron Fox.

“The drop in price is the first for a year, meaning a household using a typical amount of gas and electricity will see their annual costs fall by £129.”

Customers on variable deals can estimate their own potential saving in energy bills in July by knocking 7 per cent off their monthly direct debit. Typically, that will be about £11 a month.

The latest changes next month mean that:

• Gas prices will be capped at an average of 6.33p per kilowatt hour (kWh), and electricity at 25.73p per kWh – down from 6.99p and 27.03p respectively. A typical household uses 2,700 kWh of electricity a year, and 11,500 kWh of gas
• Households on pre-payment meters will pay slightly less than those on direct debit, with a typical annual bill of £1,672
• Those who pay their bills by cash or cheque will pay more, with a typical annual bill of £1,855
• Standing charges will fall to 51.37p a day for electricity and to 29.82p a day for gas, compared with 53.8p and 32.67p respectively, although they vary by region

“Although, the cheaper bills will kick in at the warmest time of the year, when energy use is lower, prices are not expected to change much later this year,” said Ron, of Noreus Ltd on the University of Keele Science and Innovation Park.

He added: “So maybe now is the time to shop around for a fixed deal as it could lead to a £200 annual saving.”

At the moment 35 per cent of billpayers are on a fixed tariff, up from just 15 per cent a year ago when fewer offers were available.

Every three months, the regulator Ofgem sets a maximum that suppliers can charge for each unit of energy, affecting 21 million households in England, Scotland and Wales on variable tariffs.

This typical household is assumed to use 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit.

The 7 per cent fall will mean a typical annual bill for a dual-fuel customer paying by direct debit will cost £1,720, down from the current level of £1,849.

It will also more than reverse the £111 increase under the current price cap, which came into force at the start of April.

However, prices will still be higher than a year earlier, and significantly above levels seen at the start of the decade.

High bills in recent years have also led to ballooning levels of customer debt to suppliers, with just under £4bn owed.

Ron pointed out that the price cap does not apply in Northern Ireland, which has its own energy market.

For those wanting more advice about cheaper fuel bills and green energy for their homes and offices, call Ron on 01782 756995 or contact us here.

Caption: Dialling up cheaper energy prices next month.