Around 10 million households have been told to submit their energy meter readings this weekend to avoid overpaying when cheaper prices are introduced on 1 July.
Ofgem, the energy regulator, lowered its price cap in response to a fall in wholesale prices, meaning that the average household energy bill will fall by 7 per cent from next month – from the current £1,690 for a typical dual-fuel household in England, Scotland and Wales to £1,568.
This is around £500 less than the cap in July last year, when it was £2,074 although households can be charged more depending on usage.
A typical household is expected to spend £83 on energy in July, compared with £127 in June, due to the lower cap and warmer weather, comparison site Uswitch calculated.
Those who fail to submit their meter readings will be charged based on their bills on estimated usage meaning they could overpay for their usage.
Ben Gallizzi, energy spokesman at Uswitch, said: “Households should be adding ‘read my energy meter’ to their to-do list this weekend if they want to take full advantage of lower energy prices from July.”
For those on a standard variable tariff without a smart meter, you should submit energy readings as close as possible to 1 July to ensure they are billed accurately at the lower prices.
Uswitch also urged households to look into other tariffs, such as fixed deals, to beat the predicted October price hikes.
“There are a number of fixed tariffs worth considering right now. By opting for a fixed deal, you’re locking in those rates for the duration – usually 12 months – which means households could have price certainty and avoid the ups and downs of the price cap.” said Mr Gallizzi.
While the price cap will fall next month, respected research firm Cornwall Insight predicts it will increase to £1,762 in October and remain at that level until March next year.
Earlier in May, Ofgem also made a proposal intended to remove its ban on the cheaper deal – acquisition-only tariffs, which have been used by firms to attract new customers or lure switchers from rival firms, from October 1.
This has caused a coalition of consumer groups and energy firms to urge Ofgem not to shut out their existing customers from their cheapest deals, and watchdog has written to the regulator to reconsider its proposals to lift the ban, alongside E.ON, Octopus, So Energy, Rebel Energy, End Fuel Poverty Coalition, Citizens Advice and Fair By Design.
The UK’s consumer champion Which? said some households who wanted to stay with their current supplier could be left worse off by being hit with so-called “loyalty penalties”, which is concerned.
Rocio Concha, Which? director of policy and advocacy, said research has shown that many consumers believe cheaper energy deals only available to new customers are unfair.
She said: “That’s why Which? and a coalition of energy firms and consumer organisations have written to Ofgem warning them not to lift the ban on acquisition-only pricing.
“Allowing deals exclusively for new energy customers could open the door to loyalty penalties and would come at the expense of those who wish to stick with their current supplier on their best deal.”
An Ofgem spokesman said: “We are grateful to the consumer groups and stakeholders for their response to our statutory consultation.
“We appreciate the strength of feeling on this issue and will carefully consider all perspectives in the coming weeks to inform our final decision.”