Millions of families across Britain will see their energy bills slashed by £85 per year this autumn, following a slump in demand caused by the coronavirus pandemic. That's according to leading energy supplier E.ON, which predicts a 7.5 per cent cut in standard variable tariffs this autumn.
Businesses up and down the country were forced to close during lockdown, which meant the UK used far less gas and electricity during the first half of the year than usual. As a result, E.ON expects a fall in demand in the commercial sector to be reflected in lower rates when regulator Ofgem reveals its new price cap tomorrow.
Last year, the price cap was introduced to protect customers who were being overcharged for their gas and electricity. At present, many of these customers are on a standard variable tariff, which is usually much more expensive than a fixed-rate deal. Overall, it’s thought that 11 million households are on a default standard variable tariff.
E.ON believes that the new price cap – which is due to be announced on Friday 7th August – will reduce bills by £85 per year. That's the equivalent of a month’s energy use for an average home. The new price cap will come into effect in October, meaning that customers will see a benefit before the cold winter weather bites.
However, if you’re looking to lower your energy bills before October, it's a good idea to shop around by running an online energy price comparison. This will show you the best energy deals in your area, and whether you could save money by switching to a new provider and tariff. If you’re currently on a standard variable tariff, then switching to a fixed-term deal could save you around £300 per year.
- Reduce your energy bills: Find the cheapest tariff for your home now
Government to provide more help for homes
If you’re interested in ways you can reduce your energy bills even further, then this month the government is launching its Green Homes Grant. The scheme will provide over 600,000 homeowners in England with vouchers to install energy efficient home improvements that will cut their energy bills. In total, the government claims the measures could help save families up to £600 a year on their gas and electricity bills.
We covered the announcement when Chancellor Rishi Sunak first unveiled plans in his summer statement. Now, the government has revealed further details about the scheme.
Overall, three different grants will be available. These are for:
- Solid wall, under-floor, cavity wall or roof insulation
- Air source or ground source heat pump
- solar thermal
Plus, households can use their vouchers to install further energy saving measures. These include one or more of the following:
- Double or triple glazing/secondary glazing (when replacing single glazing)
- Upgrading to energy efficient doors
- Hot water tank/appliance tank thermostats/heating controls
By using the Simple Energy Advice (SEA) service, you’ll be able to see relevant home improvements you can apply for. You’ll then be shown a list of approved TrustMark and MCS registered tradespeople in your area, who can carry out the work.
Once the works are agreed, vouchers will start to be issued from the end of September so work can commence. Depending on the voucher you’re eligible for, the government will cover at least two thirds of the work. However, for the poorest households, the government will cover the entire cost up to £10,000.
