OVO Energy, one of the UK’s largest energy suppliers with around 4.5 million customers, has unveiled its first deal cheaper than the government’s Energy Price Guarantee (EPG).

The company’s new fixed-12-month tariff comes in at £2,275, which is £225 less than the EPG, the scheme that sets a cap on the cost of a typical household’s annual energy bill at £2,500.

The development comes as falling gas prices finally bring some relief to customers, with wholesale gas prices having dropped by more than 80% since their peak last August, although they remain about triple their pre-crisis level.

At present, natural gas is used to determine the price of electricity, which is why bills have increased across the board.

Energy suppliers are now starting to offer deals below the EPG and experts predict that average bills will soon fall below the cap, unlocking savings for households, businesses and the government.

An OVO spokesperson told ELN: “We know that many of our customers want the security of a long-term fix to protect them against the continuing energy price uncertainty.”