Energy prices are due to fall for millions of customers this autumn, as Ofgem announces the price cap is to be lowered due to falling wholesale energy costs.
The price cap, that came into force in January this year, was introduced to protect 11 million UK households from upsurges to standard variable and default energy tariffs. The legislation is due to be lifted in 2020, however Ofgem can decide to extend it by up to 12 months on three occasions, reviewing the cap every six months.
Households currently on default or standard variable tariffs can now expected to pay around £1,179 a year, a saving of approximately £75. However, customers could be saving hundreds by shopping around for a better energy deal, with over 100 cheaper tariffs available on the market.
Dermot Nolan, Chief Executive of Ofgem, 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 wholesale energy.
These customers can be confident that whatever happens, the price they pay for their energy reflects the costs of supplying it.
Households can cut their bills further in time for winter, and we would encourage all customers to shop around to get themselves the best deal possible for their energy.