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Energy Bills News...
Price Cap to FALL 7% in July but likely RISE in Oct
FIX now and you can undercut that & lock in a year-long 9% FALL

On Friday, energy regulator Ofgem confirmed the Energy Price Cap will drop an average 7% from 1 July. So for the 85% of homes in Eng, Scot & Wales on a price-capped standard tariff (everyone except those on fixed or special tariffs - if you're not sure, you're likely on a capped tariff), for every £100 you spend now, you will typically spend £93 from then.

Yet each Price Cap only lasts three months. The next in October is now predicted to rise 12%. Which makes the current fixed deals out there, some of which are already cheaper than the July Price Cap (do a Cheap Energy Club comparison to find yours) look attractive, as you can likely save cash, and get the added bonus of certainty. Let's get into it...

1. Prices will FALL an average 7%, but few are average... Even on the Price Cap, the cost varies by region and payment method. Use our 'What will I pay from July?' calculator to get an estimate of your energy costs from 1 July. 

As there are no changes to standing charges, and the drop is all on unit rates, higher users will save relatively more than lower users (see point 6).

2. This is the last predicted fall for now... We're already into the assessment period for the October Price Cap (it runs 17 May to 16 Aug) - which is set mainly on wholesale costs - those the energy retailers pay. Analysts at Cornwall Insight are currently predicting:

Of course, this isn't set in stone - the predictions can significantly change over time. But at the moment, it doesn't look great over the next year.

3. Today's cheapest standalone FIX is 9% LOWER than the current Price Cap. Contrast that to Price Cap predictions over the next year of a 2% rise, and it's the biggest 'fixing benefit' we've seen since the energy crisis started. So it looks a strong time to fix, particularly if you value price certainty. Yet use our Cheap Energy Club comparison which will give you a bespoke prediction (based on your usage, area and payment method).

PS: Sorry. Cheap Energy Club isn't yet optimised for everyone. Our comparison's currently ONLY optimised for price-capped dual-fuel monthly Direct Debit users. If that's not you, while Cheap Energy Club shows your cheapest deals & price, you won't get bespoke 'savings' explanations to help you choose. We're still working on it - sorry it's taking longer than it should, but currently you can find more help in Should I fix?

4. There are specialist tariffs worth considering too... There are a number of new options that are tough to display via the traditional comparison site model (we're trying to work through how to get it right for the future as this becomes more common) and even to fit into a table, so let us walk you through the main ones...

• Octopus Tracker & Agile (for its existing customers) can be substantially cheaper. Existing Octopus customers can switch to its Tracker tariff, where rates change daily based on wholesale costs, so when they're low, as they are now, it's cheap. It's been a big winner, £700+ cheaper than the Price Cap on average over the last year, but of course you must be aware there's a risk it can go the other way... if wholesale rates rise, it could be substantially more expensive.
  
  Also, its elec-only Agile tariff's rates change half-hourly, based on wholesale prices - good for those who can shift their usage nimbly to take advantage of super-cheap times.
   
  Not with Octopus? To get these, you could try first switching to Octopus's Price Cap tariff then, once in, switching to one of these (if still available).
  
  
• Got an EV? Consider a dedicated tariff. Several suppliers have launched specific two-rate tariffs that offer cheaper electricity overnight for charging your electric vehicle (EV). If your car charge costs make up a decent proportion of your electricity usage (or you can shift other usage to these hours), these can work well. See what's available in our EV tariffs guide.
  
  
• Want to fix for longer than a year? There are some. They're not that cheap. And frankly we can't help you decide. There are simply no assessments of what'll happen to prices at that time in such a volatile market as we have now. Yet if you really value certainty, it may win out with hindsight. See longer fixes.

5. 'Is it worth waiting until July to fix?' Over to Martin for his thoughts... "I get asked this a lot, but often it's based on a confusion. The Energy Price Cap will change in July, but that only impacts a firm's standard variable tariff; it doesn't impact fixes - they're not capped.

"The rate you can fix at depends on how cheaply retail energy firms can buy energy at the time they offer the fix. We have no clue what that will be in July. It may be cheaper than now, it may be more expensive - it's about world markets. The Price Cap dropping has virtually no impact; it's based on PAST wholesale prices - so it's completely delinked.

"Of course, when the Price Cap moves, it changes the differential between its price and the cost of a fix (and firms may factor it in at the margins to their pricing decisions, as to how cheap they have to be to win market share). Yet remember you're fixing for a year (or more) and each Price Cap period only lasts three months. So the instant price is only a quarter of the decision anyway.

"That's why we try and base our assessment of whether you'll save on Cornwall Insight's predictions for the year ahead. So if you want to fix, as the differential looks decent now, it's a decent bet at the moment."

6. Standing charges are still high - you'll pay £334/yr even if you use no energy. The moral hazard of high standing charges - which many understandably rage about - continues. It costs £334/yr just to have gas and electricity (if you pay by Direct Debit), so perversely, the less you use, the less the impact of the price cap fall.

It's even worse during the summer, as many people with gas central heating have it turned off, but still pay a daily charge for that unused facility. 

We've long been campaigning to lower standing charges. Martin has been pushing Ofgem and met the Energy Secretary (who wrote to Ofgem to support his call off the back of the meeting). At last, Ofgem launched a public review of these charges - and we hear it'll report "in the summer".

7. Are you in energy credit? You SHOULDN'T be right now - so why not get it back? This is the time of year when those paying by monthly Direct Debit should have the least energy credit. So check your account. Martin's rule of thumb is if you've more than a month's worth of Direct Debit credit right now, you should ask for the rest back - see his How to get £100s of energy credit back step-by-step blog to take you through it.

As Andy emailed Martin in March: "I went to my energy supplier today to input my gas/elec readings as per your piece on breakfast TV, and was shocked to see I was £2,016 IN CREDIT. Many thanks."

8. Can you cut your bills by cutting your energy usage? Obviously, cutting use cuts bills - and hopefully there are cuts you can make to improve efficiency that don't affect your lifestyle too much. Start with energy saving tips, then add in the Energy mythbusting guide for less clear-cut issues.

9. What to do if you're struggling to pay. If you're struggling, it's always worth talking to your energy firm. Be polite and straight with it, and make sure you explain if you're vulnerable. There can be hardship & debt grants from energy suppliers. For far more guidance, see our full What to do if you're struggling to pay energy bills guide.