A MAJOR household bill could fall by more than £300 a year from April.
Ofgem’s energy price cap could drop by 16% in the spring, according to refreshed forecasts by Cornwall Insight.
Analysts predict that typical bills will fall from £1,928 a year to £1,620 a year from April 1, £40 less than Cornwall Insight had forecast in December.
It then expects energy bills to drop to £1,497 a year from July 1, compared with a previous forecast of £1,590 a year.
The reduction in Ofgem’s price cap means that a typical household will see their bills drop by more than £300 a year.
However, the price cap works by setting a limit on the maximum amount suppliers can charge for each unit of gas and electricity.
It’s not a cap on how much you can be charged for the energy that you use – so if you use more, expect to pay more.
That’s why it’s always important to perform some checks before prices change to ensure that you’re not paying over the odds.
The price cap is adjusted every three months to reflect changes in underlying costs, as well as inflation, and only impacts UK households on default or variable tariffs.
This still accounts for roughly 29million customers, according to Ofgem.
The fall in prices expected in the spring comes as a result of a mild winter and high levels of gas storage in Europe.
Craig Lowery, principal consultant at Cornwall Insight, said: “What we’ve had is a combination of comparatively mild winter conditions and that, combined with high levels of gas in storage in the UK and in Europe and a generally positive supply outlook, has really weighed on prices.”
However, any escalation in the conflict in the Middle East remains a risk to falling energy prices.
Richard Neudegg, director of regulation at Uswitch.com, said: “The prospect of the price cap falling further than expected in April is positive, but it’s little comfort for households struggling through the coldest time of year with high energy bills.
“Consumers shouldn’t count their chickens yet, however, as the further into the future predictions look, the less certain they are, given the wholesale energy market can change quickly.
“No one will know for sure how much they will be paying in April until the new price cap level is announced in February, making it hard for households to budget in these challenging times.”
We’ve listed eight steps to take now to save on your energy bills.
Energy suppliers usually require you to take regular meter readings from your gas and electricity meter to work out how much they should charge you.
Customers who don’t do this are billed on estimated usage and will likely pay more.
So if you don’t have a smart meter, ensure that you regularly submit meter readings to your supplier.
Those with smart meters don’t need to send a manual reading because they’re sent to suppliers automatically.
Submitting a meter reading just before the rates change will ensure you’re charged the correct amount for the energy you’ve used.
We’ve previously explained how to take a reading from different types of electricity and gas meters.
If you pay your energy bill by direct debit, this monthly amount should be “fair and reasonable”.
If you don’t think it is, you should complain directly to your supplier in the first instance.
If you’re not happy with the outcome you can take it to the independent Energy Ombudsman to dispute, but there are a few steps before you get to that stage.
Your supplier must clearly explain why it’s chosen that amount for your direct debit.
If you’ve got credit on your account, you have every right to get it back – although some experts recommend keeping it there through the summer, so your bills don’t go up in the winter when you use more energy.
Your supplier must refund you or explain exactly why not otherwise and the regulator, Ofgem, can fine suppliers if they don’t.
If you are disputing a bill, taking a meter reading is a must.
If it’s lower than your estimate, you can ask your provider to lower your monthly direct debit to a more suitable amount.
But beware so you don’t end up in debt later on with a bigger catch-up bill at the end of the year from underpayments racking up.
If you don’t have success in negotiating a lower payment then you can put in a complaint to the Energy Ombudsman.
There are currently fixed deals on offer that are priced close to or slightly higher than standard variable tariffs, but they offer peace of mind that your rates will not change for 12 months.
But you could end up being stuck paying more if prices fall in future so it’s important to assess the real value of these offers.
Run a comparison at Uswitch.com to see personalised options based on your usage and region.
Households should check whether they qualify for energy support schemes or grants.
The government runs the Warm Home Discount scheme, which provides £150 in energy credit to help with bills during the winter and has recently introduced the Great British Insulation Scheme.
Councils also offer the Household Support Fund.
Many suppliers have customer support funds offering home insulation, energy-efficient white goods and cash grants.
Here’s a list of schemes open right now:
Check the temperature on your thermostat and adjust it if required.
The World Health Organisation suggests most healthy people should heat their homes to 18 degrees Celsius.
Reducing the flow rate on combination boilers to around 60 degrees Celsius can cut heating bills, and you won’t notice the difference.
It should save you around £112 per year, depending on the type of boiler you have.
Get ahead of the first cold spell by checking if your radiators are up to scratch.
Bleeding your radiators will prevent cold spots, and you may want to consider turning radiator valves down – or off – in the rooms you use less often.
The average household can also save up to £75 every year if they have thermostatic radiator valves fitted on all their radiators, according to British Gas.
Valves can be picked up for less than £10 and they’re easy to replace yourself if some of yours are not working.
We’ve previously explained what the numbers on these valves mean and how to adjust them for optimum efficiency.
It’s also important to keep your radiators free from obstructions, like furniture, for maximum heat.
Tracking your usage may help you see how changing some habits can make a difference in your home.
Whether that’s setting your wash cycle at a lower temperature or eco mode, ditching the tumble dryer, or running the dishwasher only with a full load, small changes may have a big impact on your next meter reading.
For example, Which? says that washing clothes at 30°C is generally fine for clothes that aren’t dirty – this could cut energy use by 38% on average compared to a 40°C wash.
And a 20°C wash will use 62% less energy.
Here are some ways to cut dishwasher costs too.
Draught-proofing is a quick and cost-effective way to prevent heat escaping, which could save you around £50 a year.
Fitting door seals between doors and frames, attaching brushes under draughty external doors and using chimney balloons all keep the heat in.
Thermal and lined curtains also prevent heat loss.
Check out seven ways you can instantly draught-proof your house this winter.
