Householders are being warned to take a meter reading so they can take full advantage of energy cap changes. People have been told that they should take a meter reading on July 1 to ensure they are not paying more for power than they should do.
The deadline is in place because household gas and electricity bill will be capped at £2,074 per year as of July 1 - down 17 per cent from £2,500 and meaning quite a big saving for many households. Money saving guru Martin Lewis has said that people should if they possibly can take a meter reading on that date because there is a risk companies might estimate bills based on out-of-date figures.
The cap is a government protection, calculated by Ofgem which ensures that the profit energy suppliers make has an upper limit. At the moment, a typical household that pays their energy bill by direct debit pays the following rates: 10.31p per kilowatt hour (p/kWh) for gas33.21p/kWh for electricity. A standing charge of 29.11p per day for gas. A standing charge of 52.97p per day for electricity.
But as of July 1, Ofgem will introduce the following new rates: 8p per kilowatt hour (p/kWh) for gas30p/kWh for electricity. A standing charge of 29p per day for gas. A standing charge of 53p per day for electricity.
But Martin Lewis has warned that millions of households will still be paying more for their gas and electricity bills this winter. The consumer champion explained this is due to the removal of the UK Government’s £400 Energy Bills Support Scheme, which provided an automatic discount of either £66 or £67 for millions of households between October 2022 and March 2023.
In his podcast last month Martin also urged all households on a standard tariff to take a meter reading before July 1. He explained: “Virtually all households on standard tariffs will see prices change when the Price Cap falls on 1 July. So unless you’re on a smart meter which does it for you, it’s worth doing a meter reading around that date to draw a line in the sand to show how much energy you actually used on the current higher rate, and how much you used on the new cheaper rates.”
“It stops your supplier from estimating usage and potentially assuming that you’ve used more at the higher rate than you actually have.”
To help people understand the real-terms impact of the new price cap, Martin said that for every £100 per month customers pay today, they will typically be paying £83 per month from July.
He said: “With most prepayment meters - both smart meters and all gas meters - you pay the rate on the day you use energy. Yet with many non-smart, prepay electricity meters, you pay the rate on the day you top up - so customers with those should be aiming to run their credit down towards the end of June, to have as little in on 1 July when prices get cheaper. Then top up on 1 July - even just a quid - so you’re then on the new lower rates.”
