UK energy giant offers way to beat price cap by £101 | Personal Finance | Finance

Energy giant EDF Energy is promising households they can undercut the new price cap by £101 – after regulator Ofgem confirmed bills will fall by 7% from April 1.

Ofgem this morning announced that its energy price cap will drop by 7%, bringing the typical annual household bill down to £1,641 for a dual-fuel customer paying by direct debit. The reduction reflects a government decision to remove some levies from bills alongside a fall in wholesale gas prices over recent months.

The cap limits the maximum suppliers can charge per unit of gas and electricity, plus standing charges, for customers on standard variable tariffs.

How the new cap works

The £1,641 figure is not a maximum bill but the annual cost for a “typical” household using average amounts of gas and electricity. Customers who use more will pay more; those who use less will pay less.

The cap sets:

• A maximum unit rate for gas and electricity
• A maximum daily standing charge

Standing charges are fixed daily fees that cover the cost of connecting homes to the energy network and maintaining infrastructure – meaning households pay them regardless of how much energy they use.

EDF’s £100 pitch

EDF has increased the discount on its fixed-term tracker tariff, Simply Tracker Extra Jun27, by cutting annual standing charges by £100 for dual-fuel customers.

Based on the new April price cap level of £1,641, EDF says its tariff would result in a typical annual bill of £1,540 – £101 less than the cap.

Unlike many tracker deals that focus on shaving unit rates, EDF is applying the saving directly to standing charges. It guarantees £50 per fuel off standing charges compared with the price cap.

That structure means every customer receives the same £101 saving, regardless of how much energy they consume – a move likely to appeal to low-usage households who often see less benefit from unit rate discounts.

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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