Ofgem’s recent announcement of a 12.3% drop in the energy price cap has left many consumers wondering how much they’ll save on their energy bills.

According to Martin Lewis, founder of MoneySavingExpert.com, the typical dual fuel household paying by direct debit can expect their annual bill to decrease from £1,928 to £1,690 starting this April.

Price cap doesnt cap your energy bills.

However, Lewis cautions that while the price cap sets a limit on the unit price of gas and electricity, as well as the maximum daily standing charge, it doesn’t necessarily cap the total amount you’ll pay for energy.

Your bill still depends on how much energy you use, with the main price cap figure serving as an illustration of what an average energy user might pay.

In a recent post on Twitter, Lewis highlighted that for every £100 spent on energy by direct debit users today, they’ll only pay £87.70 starting April 1st.

While this is an improvement, Lewis emphasizes that energy bills are still high, nearly double the price of the cheapest pre-crisis rates.

Ways to save on your energy bills.

Lewis also points out a way to potentially save even more on energy costs by switching to the Eon Next Pledge tariff, which charges roughly 3% less than the price cap for the first year.

This option, however, requires payment by direct debit and a smart meter and isnt the cheapest on the market. Lewis describes it as a “no brainer” for those planning to stick with the price cap.

Looking ahead, Lewis predicts that switching deals may make a significant comeback from April onwards.

Ofgem’s decision to end the “Market Stabilisation Charge” means that cheaper switch deals may become more readily available.

However, the ban on “acquisition only” tariffs has been extended for another year, ensuring that energy firms must offer existing customers the same deals as new customers.

As consumers navigate these changes in the energy market, staying informed and exploring potential savings opportunities will be key to managing energy costs effectively.