ENERGY bills are set to fall by £440 a year for millions of households, according to analysts.
Energy consultancy Cornwall Insights said it expects the average household to be forking out £2,060 a year from July.
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The Government’s energy price guarantee (EPG) has frozen average bills at £2,500 a year for millions of households, although you could pay more or less depending on your usage.
However, the guarantee is set to finish at the end of June and it means energy prices are expected to fall.
The analysts at Cornwall Insights said they expect the price of electricity will drop to 29.55p per unit from the start of July from 33.2p currently.
Gas prices will fall from 10.3p today to 7.55p from the start of July.
The price cap is changed four times a year by Ofgem and goes up or down depending on the wholesale price of gas and electricity.
It will be changed again in October to bring the average bill to around £2,098, before hitting around £2,163 next January, although this is just an estimate.
Ofgem is announcing what the July price cap will be before the end of this month.
Meanwhile, Cornwall said with wholesale gas and electricity prices stabilising, it could prompt providers to introduce more fixed-rate tariffs to the market.
A fixed-rate tariff means your unit price for gas and electricity doesn’t change for the period you have fixed for.
Dr Craig Lowrey, from Cornwall Insight, said: “As the wholesale energy market has levelled out in recent weeks, our predictions for the price cap have followed suit.
“Some energy suppliers will potentially look to leverage this opportunity to bring back fixed tariffs on or around the price cap, with stable projections lowering concerns they will lose out over the fixed term.
“This potential re-emergence of competitive tariff propositions presents an opportunity for households to finally get a grip on their energy bills, having been hit hard by the energy crisis.”
However, Dr Lowrey issued words of warning about opting for fixed-rate tariffs.
“Fixing energy tariffs is a gamble, the market may go down as well as up, and households run the risk of getting locked into bills higher than the price cap,” he said.
It’s worth noting that just one energy company, Ovo, has launched a fixed-rate tariff at this point.
The advantage to a fixed-rate deal is that what you pay per unit of gas or electricity doesn’t change over the term of the deal.
It doesn’t mean what you pay every month will be the same, but because what you are being charged per unit of gas and electricity is the same, it should be easier to budget.
However, the disadvantage is that if the wholesale cost of gas and electricity falls, you might end up paying more than if you are on a variable tariff.
How else can I lower my energy bills?
Depending on your circumstances, you might be entitled to a cost of living payment to help cover the cost of everyday essentials such as energy bills.
There are three payments in total, worth £900, £150-£300 and £150 which are being paid between now and Spring 2024.
Plus, you might be able to get help via the Household Support Fund – which was recently extended until March 2024.
What help you can get depends on where you live, as it is being distributed by local councils.
But, most of the time it comes in the form of a direct bank transfer or vouchers.
You should check with your local council to see if you are eligible for any help.
If you don’t know what local council area you fall under, you can use the Government’s council locator tool.
But, for the time being, the best thing to do is cut back your costs.
You can do this by ditching energy guzzling “vampire appliances” such as tumble dryers.
Plus, getting rid of any old halogen lightbulbs and opting for LED ones could save you around £55 a year.
And keeping your showers down to four minutes can help slash energy bills and bring down water bills by £95 a year.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk
