Energy giant E.ON has priced its standard variable tariff just below the energy price cap which will fall from £1,254 to £1,179 a year from 1 October 2019.

The price change means annual bills will fall by £77 (6.1 per cent) for E.ON customers who pay by Direct Debit or £81 (6 per cent) for customers who pay by cash or cheque.

E.ON pricing its standard tariff so close to the energy price cap has prompted criticism from auto-switching service Look After My Bills.

Lily Green, head of research at Look After My Bills, said: “Surprise, surprise EON will be setting prices as high as it can, just a couple of pounds off the cap.

“It’s disappointing that with every price cap review, EON has priced as close to the cap as possible and this latest review comes as no exception. We can expect the rest of the ‘big six’ to do the same as they all see the price cap as a target rather than a ceiling.

“Even with this price cut, there are still 27 suppliers whose standard tariffs are cheaper than EON’s which begs the question – why can’t they do the same for their loyal customers?”

The energy price cap was introduced at the start of this year to give customers on pricey standard or default tariffs a better deal. It is updated every April and October to take into account the varying costs of wholesale energy.

E.ON announced earlier this week that its group operating profit had fallen by 18 per cent to €542m (£499m) in the second quarter on 2019. The firm lost 400,000 of its 4.3 million UK customers during the first half of the year.

Michael Lewis,  E.ON UK chief executive, said: “As we predicted, the overall downward trend in the wholesale markets since the start of February means customers on standard variable tariffs will benefit from a fairly significant reduction in bills from 1st October onwards. We’ll be writing to our customers in the coming weeks to make them aware of this change and how it benefits them.”

Customers paying any supplier’s standard variable tariff are likely to be overpaying for their energy. Moneysupermarket calculated that there are currently more than 100 tariffs that are cheaper than the energy price cap.