A bit of good news is coming for millions of UK households this April.

The typical annual energy bill will fall 12.3% to the lowest for two years, under the new price cap set by the regulator, Ofgem.

The price cap, arranged for April until June, will be £1,690, a drop of £238 a year for a household using a typical amount of energy.

The average household will still pay far more for their gas and electricity than before the energy crisis, which started in 2021 and escalated after Russia’s invasion of Ukraine two years ago. And the regulator has said it will add £28 to everyone’s bill over a year to cover the cost of dealing with £3.1bn of debt that customers owe to suppliers.

Lower wholesale prices paid by suppliers have led to the cut in the price cap, which hopefully will help households struggling with the cost of living.

Campaigners say bills remain too high. And standing charges – a fixed daily charge covering the costs of connecting to a supply – have risen to 60p a day for electricity and 31p a day for gas, although they vary by region. Plus the regulator will add £28 to everyone’s bill over a year to cover the cost of dealing with £3.1bn of debt that customers owe to suppliers.

The price cap affects 29 million households in England, Wales and Scotland.

Ofgem sets the maximum amount that suppliers can charge for each unit of gas and electricity but not the total bill – so if you use more, you will pay more.

Lifetime financial planner and Head of recruitment and Training James Fisher (pictured below) says: “It’s always nice to hear some good news and the latest announcement from the energy regulator certainly seems like a bright spot in a cold and wet February!  From April, the energy price cap will fall by 12.3%, meaning an “average” household may save £238. This brings prices to their lowest level in over two years, although gas and electricity still seem expensive by historical standards.

“For some households this saving may go straight towards increased costs elsewhere, such as groceries or the mortgage. However, for others, perhaps it is worth thinking about how this extra cash could be used to help to future proof your finances. Our wellbeing coaches and financial planners can certainly help you to see the most effective ways to use the cash which this price cut will free up. But if your budget is still tight, we might be able to help you to see where to cut costs further.”

At Lifetime, we have an experienced team of people to help our employer partners and their staff navigate these uncertain times – providing the necessary support and guidance to explore a healthy financial future.

Through our bespoke financial workshops, webinars, personalised coaching and financial planning, we are on hand to help you understand more about what market changes like this could mean for you and your money.

Get in touch with us to find out more or book a free 30-minute demo to understand what we do: https://www.lifetime-fm.com/lifetime-demo/

• Gas prices will be capped at 6p per kilowatt hour (kWh), and electricity at 24p per kWh. That compares to the current gas price of 7.42p per kWh and 28.62p per kWh for electricity.
• The regulator is expected to reduce the price cap again in July.