Energy bills will fall by an average of £84 a year after the price cap on suppliers was slashed to a record low.
From October, a typical family should pay no more than £1,042 a year, compared with £1,126 at present.
However, this is still as much as £250 a year more than households would pay if they switched to the cheapest tariffs.
Energy bills will fall by an average of £84 and from October, a typical family should pay no more than £1,042 a year, compared with £1,126 at present
Around 11million loyal customers are thought to be overpaying on their energy bills each year.
This is because they are on their supplier’s default or standard tariff, which is typically the most expensive.
Most suppliers charge close to the maximum amount permitted by the price cap, which is set by energy watchdog Ofgem.
However, firms also offer a range of far cheaper deals to new customers.
So households which switch regularly can save hundreds of pounds every year. There are currently 22 deals that cost under £850 a year, on average.
Those with pre-payment meters are also protected by a price cap, but it is higher.
From October these customers will pay an average of £1,075 – a £95 saving.
Energy prices are lower as a result of the pandemic causing demand to fall because fewer businesses have been able to operate as usual.
Around 11million loyal customers are thought to be overpaying on their energy bills each year because they are on their supplier’s standard tariff, which is typically the most expensive
And after the cost of wholesale electricity and gas fell 18 per cent and 22 per cent in the first three months of this year compared with the previous quarter, Ofgem has cut the cap to an all-time low.
Victoria Arrington, of comparison site energyhelpline.com, said: ‘Now is a particularly good time to consider switching. In addition, these deals lock in today’s low price for 12 months or more, protecting from any potential future price rises.’
For example, the cheapest fixed deal from Outfox the Market costs an average of £787 a year, according to energyhelpline.com. This would save households £255 a year.