Gas and electricity regulator Ofgem has put new energy price caps into place, which means the price of energy will fall for millions of people in the UK.
It is estimated that around 11 million homes in the UK will be affected by the change, while 4 million more homes will benefit from a £25 fall in a separate cap in place for pre-paid meters.
From October 1, the default energy price cap will fall from £1,254 to £1,179, and will remain at that price until March 2020.
From the same date pre-payment customers will pay a maximum of £1,217 instead of £1,242.
But despite the changes, people will still be paying more on their energy bills than they were in January – when the first price cap was implemented as a measure to stop gas and electricity suppliers from taking advantage of loyal customers.
In a statement about the capping changes, Chief Executive of Ofgem, Dermot Nolan, said: “The price caps require suppliers to pass on any savings to customers when their cost to supply electricity and gas falls.
“This means the energy bills of around 15 million customers on default deals or pre-payment meters will fall this winter to reflect the reduction in cost of the wholesale energy.”
While many will benefit from the capping changes, findings from Comparethemarket.com suggest that the newly lowered price is still on average £228 more expensive than the 20 top fixed-rate tariffs available.
Natalie Hitchins, head of home products and services at Which?, said: “Lowering the price cap will provide some relief to hard-pressed households – but millions of energy customers on default tariffs will still be left paying hundreds of pounds more than they need to each year.
“While the deadline for energy providers to lower their prices is 1 October, we would urge companies to pass on these savings as soon as possible. However, for the best deals on the market, customers should consider switching providers – you could choose better customer service while saving over £400 a year.”
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