People will still pay per unit of electricity or gas that they use (Credits: In Pictures via Getty Images)
The energy bill for an average British household will fall by 7% this summer, after the regulator Ofgem cut its price cap.
Currently, the cap for a typical ‘dual fuel’ home is £1,690 – but from July, that will drop to £1,568.
Most homes won’t be paying that precise amount, as the figure is based on an average of energy usage. But bills should tumble around the country as a result.
It’s an even more significant drop in the context of last year, when the price cap was a whopping £2,074 in July.
That means it’s been cut by more than £500 in 12 months.
However, Citizens Advice chief executive Dame Clare Moriarty warned that the damage has already been done for the UK’s worst-off households.
She said: ‘Today’s news will give small comfort to households still facing cost-of-living pressures.
‘The fall in the energy price cap reduces bills slightly, but our data tells us millions have fallen into the red or are unable to cover their essential costs every month.
‘People cannot rely on lower energy prices alone to escape the financial issues they’ve been experiencing.’
Martin Lewis has had his say on the news this morning (Picture: Ken McKay/ITV/Shutterstock)
She called for ‘better targeted energy bill support’ for the many Brits who are forced to think twice before cooking themselves a hot meal or switching the TV on.
Ofgem’s decision today came after a fall in the wholesale price of energy.
The regulator’s boss Jonathan Brearley told MPs on Wednesday that the price is still ‘significantly higher’ than before disruptions like the Ukraine war and Covid, and that the ‘best estimate is that prices are going to stay high and volatile over time’.
Analysts believe it’s likely the cap will be increased again in October before it potentially falls again in January next year.
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In a post on X, Money Saving Expert Martin Lewis pointed to analysis from Cornwall Insight which suggests ‘this is the last fall, and the coming rises are big’ – with the October increase predicted to be around 12%.
He also pointed out that the cut does not impact standing charges, the amount a supplier can charge a customer who doesn’t use any electricity or gas.
This is a developing news story, more to follow soon… Check back shortly for further updates.
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