April 2024 energy bills will fall to cheapest level in two years

In a significant development for households across the UK, energy bills are poised to take a noticeable dip in April 2024, marking a welcome respite for consumers. After months of uncertainty and escalating costs, the forecasted reduction by almost £300 comes as a breath of fresh air in the energy sector. This adjustment is tied to the latest predictions surrounding the energy price cap, suggesting a downward trend that could ease the financial burden on millions. As we navigate through the intricacies of this change, it's crucial to understand not just the immediate benefits but also the broader implications for consumers' and the decisions they take to managing their home energy bills moving forward.

Key Takeaways

• Savings Ahead: Energy bills set to plummet by 18%, saving households £294 annually.

• Weather's Impact: Mild winter boosts gas reserves, easing fears of wholesale prices rising.

• Beware Fixed Tariffs: While fixed tariffs may seem appealing, sticking to the standard variable tariff could save consumers approximately £200 annually.

Factors Contribiting to the Decrease

Lower wholesale energy prices and effective government policies through the 'Energy Price Cap' are primarily driving the upcoming decrease in energy bills. A downturn in wholesale costs, reflecting improvements in the energy supply chain and increased renewable energy usage, directly influences the reduction of the energy price cap. Regulatory adjustments ensure that retail prices are fair, stabilising the market. These factors, alongside advancements in energy technologies, pave the way for the anticipated price reduction in April 2024.

Impact on Consumers

The reduction in energy bills, with a forecasted price cap of £1,634 per year according to energy analysts - Cornwall Insight, means consumers could save nearly £300 a year. This will directly benefit the vast majority of the UK who are on Standard Variable Tariffs (SVTs), as their bills decrease automatically. However, customers on fixed tariffs won't see immediate savings unless they switch to a Standard Variable Tariff or their fixed term expires. This emphasises the need for consumers to evaluate their energy plans, especially in light of the changing market dynamics that now favour SVTs for potential savings.

Advice for consumers

As we anticipate a significant shift in the energy market with the price cap expected to tumble to around £1,634 from April 2024, the approach to finding the best energy deal is also set to change. Scott Byrom, CEO of The Energy Shop, answers the question on what consumers should do next.

"With the energy price cap predicted to fall to around £1,634 per year from 1st April 2024, consumers are essentially automatically going to switch to the cheapest deal on the market by doing nothing and remaining on their supplier’s ‘Standard Variable Tariff’. Whilst there are a number of “fixed” tariffs hitting the market, consumers are advised to “not switch” given they will be locking in for the next 12-months at today’s rates and therefore essentially paying £200 a year more for their home energy."

For consumers used to the routine of hunting down the lowest fixed tariffs, this advice marks a significant change in strategy and answers the question 'Should you fix your energy price'. It contrasts sharply with the practices of several other energy comparison websites, which continue to promote new fixed tariffs through their email marketing campaigns.

Conclusion

As we've outlined, the UK energy market is going through a significant change with the price cap projected to decrease to around £1,634 in April 2024, potentially lowering energy bills by nearly £300 annually for many households. This development represents a reversal from the trend of rising energy costs and offers a glimmer of hope for budget-conscious consumers.

Scott Byrom, our CEO, has offered a clear directive in these shifting sands: stay put on Standard Variable Tariffs to automatically benefit from the lowest rates.

The impending changes underscore the importance of staying informed and flexible. We encourage readers to regularly check in with The Energy Shop for the latest updates and expert advice tailored to these dynamic times. With informed decisions, consumers can ensure they're not only getting the best deal possible but also contributing to a more sustainable energy future.