Household energy bills set to drop from today as new energy price cap kicks in

Household energy bills are set to drop today as Ofgem’s new energy price cap begins.

The new cap, set to be implemented from 1 July to 30 September 2023, will be at an annual level of £2,074 for a dual-fuel household paying by direct debit based on typical consumption. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The move comes in response to falling wholesale prices, making a marked difference to the average household energy bill which is expected to fall by £460 annually.

However, the financial respite might not be enough for some, as costs still hover at nearly double compared to pre-energy crisis rates.

The Ofgem price cap limits the maximum amount energy suppliers can charge per unit of gas and electricity.

Those consuming more will still pay more, but the government’s energy price guarantee, which limited annual energy costs to £2,500, will no longer apply, leaving Ofgem’s cap to govern the bills.

“This remains one of the most difficult and volatile periods in history for energy consumers,” an Ofgem spokesperson said.

“And while bills remain higher than before the energy crisis, it is great news that people will see them drop by £460 a year on average from 1 July.”

For those households struggling with the persistent high cost of energy, there is help at hand. “If you are concerned about struggling to pay higher bills, there is help available. ”

“Speak to your energy provider about a payment plan you can afford and check to see if you qualify for any government schemes,” said Which? Energy editor Emily Seymour.

Alongside the price cap adjustment, the government has also taken significant steps to alleviate unfair charges on prepayment meter customers.

The changes, taking effect from July 1, will save around three million households using prepayment meters across Great Britain an average of £21 a year on their bills.

Energy Consumers and Affordability Minister Amanda Solloway said, “No one should be charged more for having a prepayment meter – today, we’re putting an end to this historic injustice.”

Removing this premium comes alongside the government’s increased spending on subsidising household energy costs, a move that saw nearly £40 billion spent between October 2022 and March 2023, marking the highest ever subsidy in UK history.

Despite these measures, energy costs remain high, indicating that the battle against rising energy costs continues.