British Gas, EDF, EON and Octopus customers given ‘unprecedented’ change today | Personal Finance | Finance

An ‘unprecedented’ change for energy bills is taking effect from today, Wednesday, April 1, for British Gas, EON, EDF, OVO, Octopus Energy and other customers of all major suppliers.

Speaking on The Martin Lewis Money Show Live on Tuesday, March 3, money expert Martin Lewis explained that bills are being cut from April 1, thanks to Government policy changes, which will see charges to fund energy schemes removed from bills.

In an unprecedented step, even those who are on fixed deals when April rolls around will still be handed money off their bills, mid-fix, Martin explained. Normally, only those on the price cap see their prices change when the price cap changes.

He told his ITV1 viewers: “Normally I’d say once it’s fixed it never moves but something perverse and good and unprecedented is coming on April 1 which I talked about last week. If you are on an existing fixed rate on April 1, policy changes, the underlying policy cost to bills are being moved, some onto general taxation, some are being cut, and that means the unit rate of electricity and the unit rate of gas, even on fixed tariffs, will be reduced on April 1 and that is locked in.

“It means an unprecedented 7-9% typical fall on existing fixes on April 1, you understand what I’m saying, not new fixes existing ones, I know some people got confused about that last week when we did a full energy show.”

The cut will be passed onto customers by cutting their unit rates for gas and electricity, equivalent to £117 a year on typical use. For example, today Outfox Energy cut my price from 20.39p per unit to 17.37p per unit, even though I’m on a fixed tariff until September.

But the bad news is that energy prices are set to rise significantly from July, thanks to the ongoing war in Iran. The latest forecasts from analysts at Cornwall Insight suggest prices could rise by as much as 18% on the Ofgem price cap in July, thanks to the conflict in Iran pushing up prices of wholesale energy for suppliers, which feeds into how the price cap is set.

Martin added: “On the price cap, which is 60% of homes in England, Scotland and Wales, if you’re on your standard variable tariff from your provider, you haven’t fixed, you’re not on a special deal, your fix ended and you came off it, you’re on a price cap tariff. Well the impact of the spike on the price cap will only be from July.

“The April price cap fall is locked in, it won’t change. The July cap is based on an assessment over three months and the average prices over three months. So the spike will, of course, push that average up, but what really matters here, is how big will the spike be and how prolonged will the spike be?”

The price most households pay for energy under regulator Ofgem’s price cap fell by 7%, or £117 a year, to £1,641 from Wednesday.

But respected energy analyst Cornwall Insight said its prediction for the watchdog’s price cap from July to September now stands at £1,929 for a typical dual fuel household – an increase of £288 or 18% on April’s cap.

Chancellor Rachel Reeves indicated that help may not be in place until regulator Ofgem sets the price cap from October until the end of the year.

She said: “From July to September, gas usage, especially by families and pensioners, is the lowest of any months of the year, because it is the summer months.

“And then it will be, really from the autumn onwards, that people’s gas usage starts increasing.

“So at the moment, we’re working on a range of contingencies, and we are looking at more targeted measures.”