Ofgem urges Britons to fix energy bills now despite July price cap being cheaper - here's why
The warning comes despite the July energy price cap being lower than it currently is.
The energy regulator said fixing now could provide better value for many customers.
The current energy price cap, which runs until June 30, is £1,849.
It falls to £1,720 for July 1 - September 30, meaning a household with typical energy use could see their annual gas and electricity bill drop by £129.
But Ofgem said comparing prices and fixing now could save customers £200 a year.
Read more: Energy Switching Guide
Anyone already on a fixed deal will not benefit from the drop on the cost of electricity and gas this summer, it added.
Customers on variable deals can estimate their own potential saving in energy bills in July by knocking 7% off their monthly direct debit - because that is the percentage drop that will happen in July. Typically this will be about £11 a month.
But the fixed deals being offered now are usually for a year, meaning households can save money and set their yearly charges before the predicted higher price cap comes in when demand is higher in Winter.
Tim Jarvis, director general of markets at Ofgem, said: "I want to remind people that you don't have to pay the price cap – there are better deals out there so it's important to shop around, and talk to your existing supplier about the best deal they can offer you."
About 35% of billpayers are on a fixed tariff - up from 15% last year when there were fewer offers available.
Octopus Energy is one provider that said fixed rates are likely to save customers money through the year, saying: "Even though variable rates have dropped, we think it's still worth locking in your prices on a fixed tariff. These currently offer our cheapest rates, meaning you could save more in the long run.
“This could change in the future, so check out our price cap predictions page for a sense of how we think prices could fluctuate over the year. Just bear in mind there are no guarantees.”
Dame Clare Moriarty, chief executive at Citizens Advice, said the latest energy price cap announcement would be "cold comfort to the millions paying off a mountain of debt on top of their monthly costs".
She added: "The government has said it hopes to provide more support to pensioners this winter, but we know that people with children are often struggling most of all with energy," she said.
"It must provide more targeted energy bill support to those hardest hit, and upgrade five million homes with money-saving energy efficiency measures."
Winter Fuel Allowance
The advice comes as the Government hints at a partial U-turn on the Winter Fuel Allowance rules coming in this winter.
About 10 million pensioners in England and Wales are set to lose their Winter Fuel Payment from this year, worth between £100 and £300.
Labour Chancellor Rachel Reeves said only those on Pension Credit or other means-tested benefits will get the annual contribution towards energy bill costs.
Now Prime Minister Keir Starmer has suggested more people should be eligible.
However, no official changes have been announced, so pensioners may want to check if they're eligible for Pension Credit.
NimbleFins previously reported how 880,000 pensioners were not claiming Pension Credit despite being eligible - with campaigners urging Britons to apply so they can access the Winter Fuel Allowance and several other benefits. You can read details of eligibility and how to apply here: Nearly one million people urged to act as Winter Fuel Payments cut
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