State pensioners have 7 days to get £120 off British Gas, EON and EDF bills | Personal Finance | Finance

Households have one week to get £120 off energy bills with a fix deal lower than the looming new price cap, which is due to come into effect on October 1.

Energy providers British Gas, E.On, EDF, and OVO are offering deals up to seven percent lower than Ofgem’s average cap of £1,717 per year for dual-fuel households, resulting in savings of up to £120 a year.

The savings may be especially welcome for state pensioners who will be affected by the Department for Work and Pensions (DWP) Winter Fuel Payment becoming means-tested this year, potentially leaving as many as 10 million without support.

Martin Lewis, financial journalist and founder of Money Saving Expert (MSE) wrote on his site: “The cheapest year-long fixes on the market right now are about seven percent less than the new October Price Cap, but they mightn’t be around long.

“That looks a good deal, as it’s currently predicted once rates go up they won’t come down.”

However, he warned: “Don’t just jump on any fix though – if you’re going to lock in, you want to grab the cheapest for your use and location, so use a whole-of-market comparison, like MSE’s Cheap Energy Club, and find out who will let you fix for less.”

Alternatively, he suggested deals such as E.on Next’s Pledge or EDF Ensure are effectively “discounted trackers”, where they move with the Price Cap and unit rates or standing charges are “guaranteed to be lower”.

At present, Outfox the Market’s Outfox the Price Cap (Oct 24) Fix’d Dual v1.0, which is a 12-month fixed rate tariff, is priced seven percent cheaper than October’s price cap. This means typical households on this tariff could expect an average bill of £1,600 over the year.

E. On Next’s Gust 12m v11/Next Fixed 12m v26 deal places just behind at £1,626, according to MSE. This marks a five percent reduction from the price cap and a saving of £91.

Meanwhile, British Gas’s Fixed Tariff 12M v15 offers a rate of £1,627, which is £90 below the cap.

Ovo Energy’s One Year Fixed Loyalty tariff, which is fixed for 12 months, is priced five percent lower than October’s cap, as is Octopus Energy’s 15M Fixed September 2024 v1.

EDF Energy’s Essentials 1Yr Sep25 v3 is priced three percent the October price cap.

The energy price cap, set by Ofgem and updated quarterly, limits the amount suppliers can charge per unit of energy but does not cap total bills, as charges are based on actual usage.

Market analysts predict that the price cap will increase by three percent in January 2025, reaching £1,762 per year for a typical dual-fuel household. This suggests that the current top fixed-rate tariffs may still be cheaper for the next six months.

However, wholesale energy prices could drop again over the summer, potentially leading those locked into a fixed deal to pay more, which is an important consideration before committing to a fixed rate.

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