Households across the UK, including customers of British Gas, Ovo, and EDF, are being urged to take a simple step that could slash at least £100 from their annual energy bills. Neil Kenward, interim director general of markets at the energy watchdog Ofgem, shared the advice on the Making Money podcast.
How to Save £100 or More
Kenward explained that by checking your energy consumption over the past year and using a price comparison website, you can identify cheaper tariffs. He stated: "There is almost always a tariff in the market that will be cheaper than that and often £100 or more cheaper for an average household per year."
He emphasised that switching from a standard variable tariff tied to the energy price cap can yield significant savings. However, he cautioned that consumers should first verify if they are already on a competitive fixed deal, as exit fees could offset potential savings.
Understanding the Energy Price Cap
The energy price cap sets the maximum amount suppliers can charge per unit of energy and standing charge, but it does not cap the total bill, which depends on usage. Kenward advised: "The best thing to do is look over a whole year because obviously you consume a lot more in the winter than the summer."
He added: "Check what tariff you're on, you might be on a good tariff already. If you're already on a fixed tariff, you might have to pay an exit fee to leave, so it might not be worth doing that. But in normal times, people can save, usually over £100 versus the price cap, if they switch."
Recent Price Cap Changes
The energy price cap has fluctuated recently. After falling from £1,758 in January-March to £1,477 in April-June, it rose to £1,663 for July-September—a 13% increase—due to geopolitical tensions. Strikes between the US and Israel against Iran, along with the closure of the Strait of Hormuz, drove energy prices higher.
Concerns persist that the October-November cap could rise further, despite a US-Iran memorandum of understanding. However, the ceasefire appears fragile after renewed military strikes and comments from Donald Trump calling Iran's leaders 'scum'. Although energy prices have dropped from peaks, they remain above pre-conflict levels.
