Households have been advised to take a meter reading to make sure they are paying the new lower price after the energy price cap drops on Saturday.
About 27 million homes in England, Scotland and Wales can expect a modest drop in energy costs over the summer after the regulator Ofgem lowered the cap on a typical annual dual-fuel tariff to £2,074 a year – down from the £2,500 a year level set by the government’s energy price guarantee.
The consumer champion Martin Lewis is among those urging people to take meter readings this weekend so as to stop their supplier estimating how much energy they have used.
“On 1 July we see prices drop an average of 17% – the effect is you’ll drop more than that if you’re a high user who uses a lot of gas, you’ll drop less than that if you’re a low user,” he told one interviewer.
“If you are on a monthly direct debit and don’t have a smart meter you should be doing a meter reading. If not, your bill will be estimated [as to] which bit came at the higher rate and which bit came at the lower rate, and that could move against you.”
If you do a reading now, “it just makes sure, if there is a discrepancy, it doesn’t go against you”, Lewis added. For “belt and braces” he suggested households take a photo of their meter in case they were unable to submit it to their provider on the same day.
The lower price cap is welcome news after more than a year of soaring living costs, although those who struggled to pay over the winter may not feel any benefit because government top-ups worth £400 have ended. However, the cut to the energy price cap could signal a revival of switching between suppliers as firms bring back more competitive fixed deals.
Although bills are generally lower in the summer, household energy costs remain at “historic highs”, so households need to keep on top of their usage, warns Ben Gallizzi, an energy expert at the comparison site Uswitch.
“Taking regular meter readings and checking the level of your direct debit are as important as ever, and it is also worth keeping a close eye on the energy market as fixed deals return,” he said, adding people should sign up for alerts on fixed-tariff deals.
“The energy market remains volatile, so deals are mostly being offered only for short periods and to limited numbers of customers,” he said. “Consumers need to be proactive and prepared to move quickly if they want to lock in certainty over their energy bills with a fixed deal.”