Households across the country are being told to submit their energy meter readings ahead of a significant drop in the energy price cap, which comes into effect on Tuesday. The move is crucial for millions to ensure they fully benefit from lower charges.
From July 1, the typical annual household energy bill for those not on a fixed tariff will decrease by £129, settling at £1,720. This represents a 7 per cent reduction and marks a substantial £660 (28 per cent) decrease from the peak of the energy crisis in early 2023, when the government’s energy price guarantee was in place.
Despite this welcome reduction, energy costs remain elevated, with the new cap still £152 (10 per cent) higher than the same period last year. The price cap regulates the unit cost of energy, not the total bill, which still depends on individual consumption. While approximately 35 per cent of domestic customers have opted for fixed deals, around 22 million households in England, Wales, and Scotland remain on the energy price cap.
These 22 million households are specifically advised to submit their meter readings by the end of the month. Failure to do so could result in estimated bills that charge the higher pre-July 1 rate for energy consumed, effectively negating the benefit of the new, lower prices.
Research for the comparison site Uswitch suggests that a fifth of households (20%) without smart meters have not submitted their meter readings in the last three months, and 6% have not done so for a whole year.
Uswitch calculated that homes on a standard price cap tariff with average usage are expected to spend £63 on energy in July compared with £113 in June, due to a combination of cheaper unit rates and lower usage over the summer.
It urged households to sign up to a fixed deal while prices remain competitive, and said there were 10 fixed deals available which were cheaper than the July price cap – the cheapest offering savings of around £145 for the average household.
Uswitch energy spokesman Ben Gallizzi said: “Customers who don’t have a smart meter should submit their readings before or on Tuesday 1 July, so their supplier has an updated – and accurate – view of their account.
“There’s a lot of uncertainty about global energy costs at the moment, which has led industry experts to predict a rise in energy bills and in the price cap this autumn.
“But households can get ahead of this possible price hike by fixing at cheaper rates now. Currently, there are a range of fixed deals currently available that are around £145 cheaper than the July price cap for the average household.
“If you can switch to a deal cheaper than the July price cap, now is a good time to make the change. We urge customers to run an energy comparison as soon as possible.”
Ofgem has also reminded households that they do not have to pay the price cap, saying “there are better deals out there”.
The fall in energy costs will come as a relief for households, who suffered through an “awful April” of bill rises, including Ofgem’s last 6.4% price cap increase.
Under-pressure households have also been hit with the biggest increase to water bills since at least February 1988, alongside steep rises across bills for council tax, mobile and broadband tariffs, as well as road tax.
