Cornwall Insight said the average family would have an energy bill of £1,720 in July if on a price-capped tariff for gas and electricity, a 7% drop from the current prices. Further price drops in October and January will be “modest”, added Dr Craig Lowrey, principal consultant at Cornwall Insight.
He said: “It’s a step in the right direction, but it should be taken in context.
“Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade. As such, there remains a risk that energy will remain unaffordable for many.”
Cheaper tariffs available
While news that the price cap for energy is likely to fall in July is good news for many, experts point out that there are fixed rate and variable tariffs below the current price cap available at a cheaper rate already.
Those who want to explore these must weigh up the possibility of energy prices falling more than expected and them being locked into rates that are above a new price cap. Many of these tariffs come with exit fees, making it expensive to switch.
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Energy consultancy BFY Group said some of the current fixed tariffs are “significantly” cheaper than the price cap for a typical customer by around £250-300 per year.
Matt Turner-Tait, senior manager at BFY Group, said: “While the gap between fixed deals and the capped rate may narrow as the price cap falls, fixed tariffs are still expected to offer savings in the near term.”
Alastair Douglas from financial data group Totally Money said there are some offers coming onto the market, despite market dominance from the big six suppliers affecting the level of competition.
“There are some offers [that] undercut the price cap coming onto the market, so it’s worth checking to see if you can save money on your bills. However, always read the small print, as some might come with hefty early exit fees of up to £300, meaning you might be tied down for a while,” he said.
