1 July 2024 – Energy bills in England, Scotland, and Wales have decreased by 7% under the new energy price cap. The typical annual dual-fuel bill paid by direct debit now stands at £1,568, the lowest in two years but still £400 higher than three years ago.
Understanding the Energy Price Cap
The energy price cap, set by Ofgem every three months, affects 28 million households in England, Wales, and Scotland. It limits the maximum price suppliers can charge for each unit of energy for a typical dual-fuel household on a standard tariff. From 1 July to 30 September, gas prices are capped at 5.48p per kWh and electricity at 22.36p per kWh. The cap does not apply to Northern Ireland, which has its own energy market.
Impact on Household Bills
A typical dual-fuel direct debit household will pay £1,568 annually, saving £122. Those who pay quarterly by cash or cheque will see a reduction of £129, bringing their bills to £1,668. Households on prepayment meters will now pay £1,522, a decrease of £121.
What Defines a Typical Household?
The cap is based on a household using 11,500 kWh of gas and 2,700 kWh of electricity annually, paying via direct debit. Bills vary depending on energy usage, payment method, property type, and energy efficiency.
Standing Charges and Additional Costs
Despite the overall cap reduction, standing charges remain unchanged at approximately 60p per day for electricity and 31p per day for gas. Ofgem is also adding £28 to annual bills to cover £3.1bn in customer debt.
Financial Support and Advice
While some pandemic-era financial aids have ended, support continues through schemes like the Warm Home Discount and the Household Support Fund, extended until September 2024. Customers struggling with bills can seek affordable payment plans, repayment holidays, and hardship grants from suppliers.
Should You Fix Your Energy Prices?
Fixed-price deals provide cost certainty but may not benefit if prices drop further. With potential price increases predicted, it’s advisable to seek independent advice and consider both price and security before opting for a fixed deal.
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