Ofgem price cap updates — Martin Lewis reveals ‘cheapest way to pay’ in 2024 as energy bills to fall in April
ENERGY bills will fall to their lowest level in two years in April, following the announcement of Ofgem's new energy price cap.
Set to come into effect on April 1, the new price cap will see the average Brit's bills fall by £238.
The cap will fall from the current rate of £1,928 to £1,690, today's figures show.
This marks the lowest price cap since Putin launched his invasion of Ukraine in February 2022.
Ahead of the fall in prices, Martin Lewis revealed that "prepay" will become the cheapest way to pay, branding it a "staggering" turnaround.
He said: "Prepay, which many of the most vulnerable use, was always the rip off, so this is a staggering turn around. And this is unlikely to be a flash in the pan - this pricing structure is likely to continue for the foreseeable future.”
Follow our live blog below for the latest news and updates...
£1.25 B&M gadget to reduce bills
The £1.25 gadget from B&M can help dry clothes faster.
The useful item can help you save up on energy bills as it slashes the clothes' drying time by half.
The dryer balls help reduce drying time by cutting it in half - just pop one in the machine with your next load.
They move around inside the tumble dryer freely, allowing the clothes to separate instead of moving in one giant clump of wet material.
How to save on energy bills
If you don't have a smart meter and haven't sent your supplier recent meter readings - it's worth submitting one now.
An updated meter reading will mean your supplier has a more accurate idea of your usage to bill you accurately.
There are several cheap and easy ways to heat your home and cut down your electricity costs.
Every degree you increase the temperature of your thermostat is estimated to hike your heating bill by about 10% - so get the balance right.
The Energy Saving Trust recommends that your thermostat should be set to the lowest comfortable temperature, which for most is between 18°C and 21°C.
Prevent your home from letting heat escape
Ventilation is good for health and air quality but it's the first place where heat will escape.
If there's a draught, grab a draught excluder and plug the gap.
Prices for draught excludes start from a fiver in most stores but a thick blanket rolled up next to a problematic door will work just as well.
Seal up any draughty windows with easy-to-use draught excluders, prices for them start at £1.99 and they could save up to £70 on your energy bills.
14 errors that could be costing you a small fortune
According to Uswitch, around 93% of households admit to one of these bad energy habits.
This includes anything from overfilling the kettle to leaving lights on – but doing so could unnecessarily add hundreds of pounds more to our energy bills.
Take a look at the top errors below.
Many are still struggling with bills
Although the price per unit of energy is falling, charities have warned that many are still struggling to pay their bills.
National Energy Action (NEA) says that despite the energy price drop households are still paying around £400 more than they were in October 2021.
Chief executive of NEA, Adam Scorer, said: "This is, of course, good news – any fall in energy bills is welcome.
"However, the drop coming in April still leaves bills significantly higher than they were before the energy crisis began. For two and a half years, household budgets have been stretched beyond breaking point by high energy bills."
Scorer has called for a social tariff to provide "permanent, deep" protection for low-income households.
He also said long-term, significant investment in energy efficiency is needed to make sure households are "resilient" against energy crises.
Energy price cap impacts 29m people
The energy price cap is adjusted every three months to reflect changes in underlying costs, as well as inflation, and only impacts UK households on default or variable tariffs.
This still accounts for roughly 29 million customers, according to Ofgem.
The fall in prices in the spring comes as a result of a mild winter and high levels of gas storage in Europe.
How do I calculate my bill?
To calculate how much you pay on your current bill, you will need to find out both your unit rate for gas and electricity and the standing charge for each fuel type.
The unit rate will usually be shown on your bill in p/kWh.
The standing charge is a daily charge that is paid 365 days of the year - irrespective of whether or not you use any gas or electricity.
You will then need to note down your own annual energy usage from a previous bill.
Once you have these details you can work out your gas and electricity costs separately.
Multiply your usage in kWh by the unit rate cost in p/kWh for the corresponding fuel type - this will give you your usage costs.
You'll then need to multiply each standing charge by 365 and add this figure to the totals for your usage - this will then give you your annual costs.
Divide this figure by 12 and you'll be able to work out how much you should expect to pay each month from April 1.
Energy bills to hit lowest level in two years
Energy bills will fall to their lowest level in two years in April, following the announcement of Ofgem’s new energy price cap.
Set to come into effect on April 1, the new price cap will see the average Brit’s bills fall by £238.
The cap will fall from the current rate of £1,928 to £1,690, today’s figures show.
Thousands of households missing out on free insulation
Low-income and vulnerable families can get help improving the energy-efficiency of their homes through a Government scheme.
The Energy Company Obligation (ECO) is designed to tackle fuel poverty across the UK.
Under the ECO scheme, suppliers have a legal obligation to implement energy-saving measures in your home.
Which benefits are means-tested?
The means-tested benefits are:
- Universal Credit
- Income-based jobseeker’s allowance
- Income-related employment and support allowance
- Income support
- Pension credit
- Tax credits (child tax credit and working tax credit)
- Housing benefit
- Council tax support
- Social fund (sure start maternity grant, funeral payment, cold weather payment)
To be eligible to receive any of these benefits, you must be able to demonstrate that your total capital is less than a certain amount.
How do I apply for the cold weather payment?
You do not need to apply to the scheme, as cash is automatically sent within a two working weeks to anyone eligible.
If you don’t receive a payment but believe you’re eligible, contact your or .
Alternatively, call the Universal Credit helpline on 0800 328 5644.
If you’re getting Universal Credit, you can also sign in to your account and add a note to your journal.
When temperatures plummet, you can check if your area is due a cold weather payment by typing your postcode into the government’s tool on its website.
Free debt advice
If you’re in debt there are plenty of services you can take advantage of and they offer free advice on how to manage debt.
Most of them can offer you free guidance and help in person, over the telephone or online.
- – 0800 138 7777
- – 0808 800 9060
- – 0800 138 1111
- – 0808 808 4000
Octopus Energy offers free electric blankets
Energy firm Octopus is offering customers a free electric blanket through its £30million Octopus Assist fund.
The supplier will offer the blankets to its most vulnerable customers during the colder months of the year.
This means those most likely to receive help are the elderly and those with mobility issues or other medical conditions.
To find out if you are eligible, simply contact Octopus.
Deals available to cut energy costs
There are currently fixed deals on offer that are priced close to or slightly higher than standard variable tariffs, but they offer peace of mind that your rates will not change for 12 months.
But you could end up being stuck paying more if prices fall in future so it's important to assess the real value of these offers.
Run a comparison at Uswitch.com to see personalised options based on your usage and region.
Martin Lewis shares how you can 'beat' the energy price cap
Martin Lewis this week shared how Brits can "beat" the energy price cap.
Speaking on the Martin Lewis Money Show on Tuesday he said: “Everyone or almost everyone can beat the price cap by three per cent because the E.ON Next Pledge is a very good tariff and existing customers can switch to it on direct debit and it is three per cent below the price cap.
“So if the price cap drops, it drops, if the price cap goes up, it goes up but it’s always three per cent cheaper for a year, so it’s an easy simple win.”
The E.ON Next Pledge acts as a variable tariff that always provides a 3 percent discount on the energy price cap.
Martin Lewis reveals five key points as new price cap announced
Britain's resident money saving expert has revealed the five key facts you need to know as Ofgem cuts the energy price cap.
Taking to X he wrote:
- Prepay'll be CHEAPEST way to pay
- Standing charges RISE to £334/yr
- Switching likely to restart 1 Apr as Ofgem changes background rules
- Brit Gas Price Promise no longer looks as good
- Cut 3% off the Cap
What temperature to run your washing machine at to save money
To save on your energy bills, experts suggest lowering the temperature at which you wash clothes.
You’ll still be getting fresh and clean clothes if you switch from a 40C wash to a 30C one and it could save you £12 a year on average, according to Energy Saving Trust.
If you use your washing machine a lot, you’ll save even more if you lower the temperature.
Uswitch energy expert Will Owen previously told The Sun: “Use a cold water or 30C cycle where possible. It’s only for particularly dirty clothes, bad stains or underwear that you are likely to need warmer temperatures.”
Why are standing charges going up?
Standing charges will rise as part of Ofgem's new energy price cap.
Taking to X, Martin Lewis explained why this is the case.
He wrote: "Much is electricity distribution costs (a standard inflationary rise) some maybe bad debt provisions (which have gone up due to so many who can't pay - but I don't yet know if that's been put in the standing charges.)
"Also this time, some of the rise is due to the prepay/direct debit equalisation. To cut prepay standing charges by £52/yr, Direct Debit had to rise £10/yr."
Reduce heating bill by 10% by turning it down by one degree
You can reduce your overall heating bill by 10% by turning it down by just one degree, according to Energy Saving Trust.
If you are able to brave the cold a bit more – you can shave more than £380 off your energy bills if you turn your thermostat down by three degrees from 23°c to 20°c.
The World Health Organisation suggests that most healthy people should heat their homes to 18°C, so you could save even more by reducing it even further.
Small appliances that could be leaving you out of pocket
There may be some appliances around your home that are costing you more than you thought if you leave them plugged in.
Just having your computer on standby could be setting you back £95 a year, with your TV costing £24.
Despite using your Wi-Fi the majority of the time, when you aren’t, the router could be costing £19.
Microwaves are costing households an average of £16 per year when plugged in and game consoles cost £12 when left on standby.
Meanwhile, your printer can cost £20 so make sure you are unplugging any appliances when you aren’t using them.
What is the energy price cap?
The price cap on energy bills was first introduced by regulator Ofgem on January 1, 2019.
The price cap is designed to prevent Brits on expensive tariffs paying over the odds.
From 2022 we saw a period of price cap increases, seeing Brits' energy bills skyrocket.
Today, it was announced that the price cap will fall from the current rate of £1,928 to £1,690.
Free debt advice
If you’re in debt there are plenty of services you can take advantage of and they offer free advice on how to manage debt.
Most of them can offer you free guidance and help in person, over the telephone or online.
- – 0800 138 7777
- – 0808 800 9060
- – 0800 138 1111
- – 0808 808 4000
Top tips to save money on your heating
You may not be aware that by using “vampire settings” you could save £850 on your energy bills.
Here are some different ways to save:
- Thermostat – £380 Reducing your thermostat by one degree can reduce your fuel bill by 10%, according to Energy Saving Trust
- Dishwasher – £143 Running your dishwasher at a lower temperature such as 45ºC to 50ºC can save you more that £100
- Boiler – £112 Changing the flow temperatures on , according to charity, Nesta means you can save an average of £112 per year
- Radiator – £75 The average household can save up to £75 every year if they have thermostatic radiator valves fitted on all their radiators, according to British Gas
- Tumble Dryer – £53 Tumble dryers can cost around 67p per cycle but most models come with an eco-mode that can be used to save the environment – and some cash
- Fridge Freezer – £50 The Food Standards Agency recommend that the temperature of fridges be set to 5°C and freezers should be at -18°C. Having it set at the optimum temperature is also better for your wallet
- Washing Machines – £37 Most models of washing machine come with an eco-mode that can be used to save some money
What has Ofgem said?
Jonathan Brearley, Ofgem chief executive officer, said: "This is good news to see the price cap drop to its lowest level in more than two years – and to see energy bills for the average household drop by £690 since the peak of the crisis – but there are still big issues that we must tackle head-on to ensure we build a system that’s more resilient for the long term and fairer to customers."
How will the change impact you?
From April 1, the average price of fuel will fall to its lowest level in two years.
The energy price cap will fall from the current rate of £1,928 to £1,690, today's figures show.
This will see the average Brit's energy costs fall by £238.
