MILLIONS of households across England, Scotland and Wales will see their energy bills fall this summer.
That's because energy watchdog Ofgem’s latest price cap is coming into force from July 1, and it's expected to be lower than the current cap.
The regulator said the new cap will save the average household £122 a year, reducing typical annual bills from £1,690, to £1,568.
To avoid being overcharged, households on Standard Variable Tariffs (SVTs) should submit meter readings as soon as possible after the cap comes in.
Doing this stops your supplier from estimating your usage and potentially charging you for more energy at the higher rate, rather than the previous rate.
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Of course, you could find that your bills go up, particularly if you’ve had the heating on lots in June - but you will avoid disputes and be certain that your bill is fair.
Who needs to take a meter reading?
If you’re one of the 29million households on an SVT and you also don’t have a smart meter or a pay-as-you-go meter, then you should submit a reading.
SVTs are the accounts that are governed by the cap, and if you don’t have a smart meter then your readings aren’t submitted automatically.
So, unless you let your provider know what the reading is on July 1, then it will estimate your bill, which could mean you end up paying for more energy than you actually used.
If you have a smart meter
If you have a smart meter, you don’t need to take a reading, as this is sent to your supplier automatically.
But it is worth making sure that your meter is sending readings correctly, as sometimes smart meters can have issues.
Take a photo of your meter on July 1, and compare it to what is showing when you log into your energy account.
It is worth keeping the photo as you can submit it to your provider later if there are any disputes.
If you prepay for energy
If you have a prepaid meter, you also don’t need to submit any readings, as you pay for your energy in advance.
However, energy you pay for after the July 1 deadline will be cheaper than what you pre-load before then, which may impact how much you choose to buy and when you load it.
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If you're running low, it may save you money to wait until after July 1 before you top up.
If you're on a fixed rate
The cost of fixed rate contracts is not determined by the price cap.
You’ll be locked into the price that you fixed on, which could be higher or lower than what you would be paying on an SVR.
It is worth looking at when your contract ends, and seeing whether you might be better off on the SVR or with another provider.
Natalie Hitchins, Which? Home products and services editor, said: "With prices predicted to remain fairly stable for the rest of the year, more competitive fixed deals may become available in the coming months.
"As a rule of thumb, we wouldn’t recommend fixing a contract longer than 12 months, higher than the July price cap or with significant exit fees."
How to submit a meter reading
Most energy companies make it easy to submit a meter reading through either your online account or an app.
Typically, you’ll log in and be asked to provide the latest
numbers.
Some will even let you provide the reading over the phone or via WhatsApp or SMS.
To find out what options you have, check the website of your supplier.
The easiest thing to do is take a picture of both your gas and electricity meters.
That means you’ll have the number to hand when it’s time to submit.
What is the energy price cap and how is it changing?
Ofgem changes the energy price cap every three months.
The cap limits the maximum amount energy suppliers can charge you for each unit of energy you use if you live in England, Scotland and Wales.
However, it's important to note that this doesn’t mean there is a cap on your actual bills.
The amount quoted for the cap is based on average usage.
If you use more energy than the typical household, you’ll pay more overall.
On July 1, the max price a supplier can charge for gas will fall from 6.04p per kWh to 5.48p.
The price of electricity will fall from 24.5p per kWh to 22.36p.
Unfortunately, standing charges - the fixed daily amount that consumers pay to be connected to the grid - will not change.
That means that even before you’ve used a unit of electricity or gas, you’ll have to pay £6.42 a week just to be connected – or £334 a year.
Laura Suter, director of personal finance at AJ Bell, said: “While the drop will be welcomed by households and means that a typical bill will fall to the lowest level in two years, bills are still more than £400 a year more expensive than three years ago.
"On top of that, an increase in the price cap is expected in October just as the nation heads into winter."
The price cap also varies depending on the way you pay.
The £1,568 average price cap from July will apply to those who pay by direct debit.
For those on prepayment meter it will be £1,522 and £1,668 for those paying on receipt of bills.
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