Energy price cap drop – what you need to know
There’s good news for energy customers as of 1st July, as the new energy price cap came into effect. Yes, you read that correctly – after months of gloomy headlines about rising gas and electricity prices, mortgage rates, and stubborn inflation, a ray of positivity has emerged this summer.
We’ll take you through what the price cap is, how much it’s decreased by, and how this translates into cost savings for consumers.
What is the energy price cap?
The energy price cap limits what utility companies can charge customers for each unit of gas and electricity they use. It sets two things:
The maximum amount energy firms can charge for each unit, measured in kilowatt-hours, of gas and electricity.The maximum daily standing charge, which is the part of your bill that you pay to stay connected to the grid.
It currently applies to most households, unless you’re on a fixed rate tariff, which are set by the energy companies, not the regulator, or those that use oil to heat their homes.
How much is the energy price cap reduction?
Ofgem, the energy regulator, announced the price cap reduction back in May. The reduction, which came into effect on Saturday 1st July, is from £3,280 to £2,074. This figure is how much an average household would typically use over the course of the year, based on the updated unit price, which is decreasing by around 3p.
This translates to a saving of £426 for an average household energy bill, but the total annual cost per customer will vary depending on the size of your home, how many people you live with and how much energy you use. This price cap will remain in place until September.
How can I save money on my energy bills?
With all the talk about the new price cap, it’s important to consider how this will affect your home. Here’s a checklist to help you stay on top of your energy usage:
Keep your meter readings up to date. If you don’t have a smart meter, take regular meter readings and submit them to your supplier, to make sure you bill is accurate.Check that your monthly direct debit payments reflect your actual usage. If they don’t, contact your supplier.Monitor your energy usage, using an app like Utrack, which is free to download and use.Check what energy support grants you, your family, or friends may be eligible for.Shop around for a new gas and electricity deal, but take your time to find the right one for you. You can even register for alerts about new gas and electricity deals through Uswitch, or keep up to date through MoneySavingExpert.
A-Plan’s lightbulb moment
Here at A-Plan, we know how stressful the cost-of-living crisis is for you and your household. And, when it comes to energy usage, the sensible approach is to make several small changes throughout the warmer months to build up enough energy credit for the winter months.
It’s surprising how small changes can have a big impact on the bottom line. But with all the hints and tips out there, we wanted to help you understand which ones actually work?
To help our customers reduce their energy costs, we gave away 10,000 Status energy-saving bayonet light bulbs alongside our cost-of-living booklets. Something as simple as a lightbulb can make a big difference!
Based on everyday use, each recipient of two energy rated A+ Status 9W LED (equivalent to a 60W) bayonet bulbs can benefit by over £100 a year in energy savings. One hundred of A-Plan’s high street branches across the UK gave away 10,000 Status 9W LED bayonet lightbulbs – saving a combined £387,192* in energy usage in total. If you weren’t lucky enough to get a free one, it’s worth purchasing one from Amazon or your local supermarket now to start saving before winter.
We’ve also got plenty of tips and guidance on other money-saving queries, such as your mortgage, fuel, and having fun this summer. Follow us on social media, to keep up to date with our latest insights.
PLUS you could be in with a chance of winning some amazing prizes as part of our bumper Summer of Fun campaign! We want to help everyone enjoy the sunshine, without worrying about the cost of living. Simply check our social media pages for weekly prize giveaways, including a paddleboard, a Cadac camping grill, National Trust membership and many more!
Sources: Sky News, iNews, Which?, Uswitch, MoneySavingExpert.com
Based on a total of 10,000 lightbulbs*:
Incandescent GLS 60W x 10,000 bulbs x 2190 x 34p per kWh = £446,760LED SMD GLS 8W=60W x 10,000 bulbs x 2190 x 34p per kWh = £59,568Saving a combined total of £387,192
