Ofgem announced this morning that its energy price cap will fall by 7 per cent
Ofgem announced this morning that its energy price cap will fall by 7%(Image: Liubomyr Vorona via Getty Images)
Energy provider EDF Energy is pledging that households can save £101 compared to the new price cap – following regulator Ofgem’s confirmation that bills will decrease by 7% from April 1.
Ofgem announced this morning that its energy price cap will fall by 7%, reducing the typical annual household bill to £1,641 for a dual-fuel customer paying by direct debit. The decrease follows the Government’s decision to scrap certain levies from bills, combined with a drop in wholesale gas prices in recent months.
The cap restricts the maximum amount suppliers can charge per unit of gas and electricity, plus standing charges, for customers on standard variable tariffs.
Understanding the new price cap
The £1,641 figure doesn’t represent a maximum bill, but rather the annual cost for a “typical” household consuming average quantities of gas and electricity. Customers using more energy will pay more; those using less will pay less.
The cap establishes:
- A maximum unit rate for gas and electricity.
- A maximum daily standing charge.
Standing charges are fixed daily fees covering the cost of connecting properties to the energy network and maintaining infrastructure – meaning households pay these regardless of energy consumption.
EDF’s £100 Offer
EDF has enhanced the discount on its fixed-term tracker tariff, Simply Tracker Extra Jun27, by slashing annual standing charges by £100 for dual-fuel customers.
Based on the new April price cap level of £1,641, EDF claims its tariff would deliver a typical annual bill of £1,540 – £101 below the cap. Unlike many tracker deals that cut unit rates, EDF is applying the saving directly to standing charges, guaranteeing £50 per fuel off standing charges compared with the price cap.
This structure means every customer receives the same £101 saving, regardless of how much energy they use – a move that is likely to attract low-usage households who typically benefit less from unit rate reductions.
Philippe Commaret, Managing Director of Customers at EDF, said: “It is welcome news that Government support means that the price cap is decreasing, but we wanted to see how we could go further in reducing costs for EDF customers. There are still 57% of customers on standard variable prices – by opting for a fixed or tracker tariff customers can start saving today.
“This tracker tariff guarantees customers will always save £100 against the price cap, regardless of the changes to the energy price cap over the next year. Plus, by applying the discount through standing charges, we ensure that customers who are already working to improve their energy efficiency and reduce their carbon footprint still benefit from equal cost savings.”
The tariff is available to new and existing customers and applies to those paying by direct debit, cash cheque and pay-as-you-go, for a limited time.
Battle for switchers
The move underlines the renewed battle between energy suppliers as wholesale costs ease and firms seek to tempt households off standard variable tariffs.
With 57% of customers still on default deals, companies are increasingly rolling out fixed and tracker tariffs pitched just below the cap in an effort to lock in market share before the next price review.
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