Hi,

This morning, energy regulator Ofgem announced the latest Energy Price Cap, which will drop by 6.7% in April.

Yet it's not just those on the Price Cap that will see costs drop - those on fixes will see a 7% to 9% fall too. So, we wanted to email you today to let you know what’s happening, and what you need to do (if anything).

Why is my price going to drop?

Most of the reduction is because two policy costs have been taken off bills (ECO scheme ended, and for three years 75% of the Renewable Obligation scheme will be shifted to general taxation).

I’m already on a fix – what do I need to do?

Probably nothing, assuming you’re happy with your fix. Most fixes will see costs fall on 1 April, with the cheapest dropping typically 7% to 9% (the Government’s changes take costs off the unit rates, so all savings depend on how much energy you use).

It's only 'most' fixes because some smaller companies were exempt from the ‘ECO’ scheme so the reduction on their fixes will be smaller (as they weren't on it, so scrapping it doesn't change anything there). See our firm-by-firm breakdown of how much your costs could come down.

If you’re not happy with your fix, use Cheap Energy Club to run an up-to-date comparison… just remember to factor in any exit fees.

I’m on the Price Cap – what’ll happen to my bills?

The Ofgem Price Cap for the three months starting 1 April is to FALL by 6.7% with the biggest reduction on electricity unit rates. Here’s how that change will manifest in terms of average rates on Direct Debit (from 1 April)…

Elec unit rate: 24.67p/kWh (was 27.69p) DOWN 10.9%.
Elec Standing Charge: 57.21p/day (was 54.75p) UP 4.5%.
Gas unit rates: 5.74p/kWh (was 5.93p) DOWN 3.2%.
Gas Standing Charge: 29.09p/day (was 35.09p) DOWN 17.1%.

For illustration, someone on the rather meaningless Ofgem typical rate will see their annual equivalent cost drop by £117 – though of course this is a three-month cap.

The Price Cap only applies to firms' Standard Variable Tariffs (which over 60% of homes are on) – the default ones you're on if you've never switched or your fixed deal ended and you did nothing.

However, while your costs will drop around 6.7% if you stay on the Price Cap, you can save up to 14% by fixing. And as fixes will also drop in April, in many cases more than the Price Cap, that differential will remain. As your cheapest depends on usage and location, do a full market comparison. Here are the latest standout deals…

Ends 5pm Thu. MSE Exclusive British Gas 1yr fix. This deal has relatively low Standing Charges, and is around 14% less than the current Price Cap on typical use (including MSE cashback). It’s for dual or single fuel users who pay by monthly Direct Debit or on receipt of a bill.
Outfox Energy. Again, this one’s around 14% less than the current Cap on typical use, and is for dual-fuel, monthly Direct Debit users only.
Low standing charge 'tracker' tariff. The EDF Simply Tracker Extra tariff matches the Price Cap unit rates (so when they move, it moves) but with lower Standing Charges for a year. It's now £100 lower (it was £50), plus via our link you get £50 dual-fuel EDF cashback + £20 MSE cashback (half both for elec only). So that's £170 under the Cap all in. Smart meters aren't required (unless you're on prepay), it's dual fuel or elec-only. Whether it works for you over the cheapest fixes depends on usage... On Direct Debit? Use roughly under £100/mth of energy in total and it beats top fixes in the first year when factoring in the cashback. On Smart Prepay? As there are no decent fixes, it's worth it for all but the highest users.
Specialist tariffs can be winners too... There are plenty of specialist tariffs that can work out cheaper, including those for very low users, EV drivers, and solar panel owners, while sophisticated energy users can look at rapid-change time-of-use tariffs. It’s likely the April policy change savings will be incorporated into these tariffs too, though we don't have official confirmation yet, nor know how it'll be incorporated into more complex tariff structures.

I can't afford to pay my energy bills - what do I do?

It's always worth first talking to your energy firm. Some can get hardship & debt grants from suppliers. For far more guidance, see our full What to do if you're struggling to pay energy bills guide.

Thanks,

The Cheap Energy Club team

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