Post By : 2025-05-25"

People urged to fix energy bills as prices fall"

Households are being urged to shop around for cheaper energy deals despite prices falling from July.

A typical gas and electricity bill will fall by £11 a month from July, but regulator Ofgem said switching to a fixed deal could provide better value for many customers.

It said shopping around could lead to a £200 annual saving, but anyone currently on a fixed deal will not benefit from the fall this summer.

The cheaper bills will kick in at the warmest time of the year, when energy use is lower, but prices are not expected to change much later this year.

Every three months, the regulator's price cap, sets a maximum that suppliers can charge for each unit of energy, affecting 21 million households in England, Scotland and Wales on variable tariffs.

The price cap does not apply in Northern Ireland, which has its own energy market.

The drop in price is the first for a year, meaning a household using a typical amount of energy will see their annual bill fall by £129.

Prices remain high

Customers on variable deals can estimate their own potential saving in energy bills in July by knocking 7% off their monthly direct debit. Typically, that will be about £11 a month.

Ofgem has said while its price cap will be lower, there are cheaper deals being offered for fixed deals, which usually last a year, by some suppliers. Securing a fixed deal can offer people certainty over monthly payments.

"I want to remind people is that you don't have to pay the price cap – there are better deals out there so it's important to shop around, and talk to your existing supplier about the best deal they can offer you," said Tim Jarvis, director general of markets at Ofgem.

Currently 35% of billpayers are on a fixed tariff, up from just 15% a year ago when fewer offers were available.

But not everyone can switch, including anyone in debt to their supplier.

"Others may simply lack confidence due to previous bad experiences with moving to another supplier or fixed deal. This means we can't rely on the benefits of switching alone to help these households afford their bills," said Peter Smith, from charity National Energy Action.

Mr Jarvis said the drop in energy bills in July reflected a fall in the international price of wholesale gas.

"However, we're acutely aware that prices remain high, and some continue to struggle with the cost of energy," he said.

Households were hit by a series of bill hikes for energy, water and council tax at the start of April, which drove inflation, which charts the rising cost of living, to its highest for more than a year.

However, official figures released on Friday showed retail sales rose by 1.2% in April, the fourth monthly increase in a row, in a sign consumers were willing to spend more on food and household goods.

Warmer temperatures and sunny weather also drove sales higher, the Office for National Statistics said.

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