Households are being urged to switch to a fixed energy tariff now to save up to £111 before Prime Minister Andy Burnham's VAT cut on electricity bills takes effect on October 1. The move comes as the energy price cap is expected to rise by 4 per cent, pushing typical annual bills to £1,729.
Andy Burnham's VAT cut and October price cap rise
On his second day as prime minister, Labour Party Prime Minister Andy Burnham promised to scrap VAT on household electricity bills from October. The government said the move would reduce the average household's electricity bill by £45. However, the actual saving could depend on how much each household uses.
On Wednesday, British Gas, EDF, EON, Ovo and Octopus customers were dealt a blow when Cornwall Insight confirmed that the energy price cap is expected to rise by 4 per cent in October. The increase would see the typical household facing a yearly bill of £1,729, up from £1,663, Cornwall Insight has said.
Fixed tariffs offer significant savings
Thankfully, the best fixed deals on the market right now are around 12 per cent lower than the predicted price cap in October. The cheapest is priced at £1,522 for a typical home – a saving of £207. It is a £111 saving on the current £1,633 cap, too.
Richard Neudegg, director of regulation at Uswitch.com, said: “Don't suffer higher winter bills when you don't have to – a decent fixed tariff beats these rates and protects you from further price rises. Every week spent on a standard tariff is another week paying higher rates than you need to.”
Experts urge action before winter
Laura Hinton from MoneySuperMarket Energy said: “Despite the large-scale disruption to wholesale energy costs, there are still fixed deals available that beat the current price cap. UK households face a rise in the energy price cap just as we go into autumn and winter, when energy use increases. What's more, current forecasts suggest the price cap could rise again in January, meaning now is the time to act if you want to lock in cheaper energy bills and have more certainty about your energy bills over winter.”
Hinton added: “Plus, with MoneySuperMarket's SuperSaveClub, you can earn a £10 reward when you switch to an eligible deal.”
