The Energy Price Cap is coming down at the start of July – meaning we’ll pay less
The amount we’ll pay for energy is to drop from next month as the Energy Price Cap falls.
Regulator Ofgem recently announced the new price cap – and it’s down by 17 per cent.
That means that a typical home will pay around £2,074 a year for gas and electricity.
If we have a prepayment meter, it’s a tiny bit more at £2,077. But for the first time, these prices are more in line with rates paid by direct debit customers.
(It’s a good idea to use up our credit and avoid topping up just before 1 July if we can. That way we won’t pay more than we have to.)
Why the change?
Before the cut in the Energy Price Cap the typical bill was £2,500. This was the level the government capped prices at with its guarantee in October 2022 and was lower than the previous cap.
But now the Energy Price Cap is below this, meaning that those of us on standard variable tariff (that is, if we’re not on a fixed tariff) will pay less. Almost all of us will move to this new lower price.
It’s really important to remember though that this is NOT a cap on bills. It’s a cap on the maximum price we can pay per unit of energy. The more we use, the more we pay (so looking at ways to save energy is still a smart move).
The price cap is amended every three months to reflect the wholesale prices that suppliers pay for energy.
One last thing…
The government’s Energy Price Guarantee (the £2,500 figure) will stay in place until March 2024.
This means that if Ofgem’s Price Cap (the figure that’s just come down) were to go up again, we’d still be protected by the Price Guarantee.
Luckily, though, experts have said energy prices are likely to drop a bit more in autumn before rising slightly at the start of 2024.
Keep an eye on the Quids in! website for updates and energy-saving tips.
Image: Teona Swift / Pexels