Energy regulator announces July lowering of price cap

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Energy regulator announces July lowering of price cap

Lifetime news

Posted on: 25/05/2023

Around 27 million UK households can expect a modest drop in their energy bills from July, after the regulator Ofgem announced a lowering of the price cap.

When the change comes into effect this summer people will see their average gas and electricity bills fall from the £2,500 a year level set by the government’s energy price guarantee, to £2,074.

However, that is still double the price of energy from October 2021, when Russia began restricting supplies of gas to Europe in a move that saw wholesale prices shoot up. Before the energy crisis the typical household paid £1,271 a year for their gas and electricity usage.

Those people who struggled to pay their bills over the winter months may feel little or no relief from the Ofgem decision. That is mainly because the government top-ups, worth £400 between October to March, are now at an end.

And it bears repeating that households could still face dual-fuel bills above July’s new cap of £2,074 if they use more than the typical amount of energy. People will pay for what they use.

Ofgem’s cap only limits the rate that energy suppliers can charge customers for each unit of gas and electricity – not a household’s total bill.

The energy price cap does not include businesses, charities or public sector organisations such as hospitals, schools and care homes.

So, who will be paying what from July?

  • A dual-fuel household paying by direct debit will now see a typical annual bill of £2,074
  • Homes using a pre-payment meter will typically pay £2,077 a year
  • People paying by cash, cheque or bank transfer – usually every three months – will have a typical annual bill of £2,211


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