Households to save £122 on energy bills as prices drop

Ofgem have revealed the energy price cap in Britain will fall 7% to the equivalent of £1,568 a year this summer, although experts claim individuals will still face pressures.

Currently, Ofgem’s energy price cap is set at £1,690 but this is set to fall by £122 in July as a result of a drop in wholesale gas prices. The cap reflects the average annual dual-fuel bill for 29 million households and takes affect from July until the end of September.

However, despite this news appearing positive, the reduction still leaves bills far above the £1,154 cap in the summer of 2021, before the energy crisis began squeezing budgets. Wholesale gas prices started to climb three years ago, but really skyrocketed following Russia’s invasion of Ukraine in 2022.

Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit, said: ‘Households are still struggling with bills that are hundreds of pounds higher than pre-crises levels, and estimates suggest bills may rise again as we head into winter.’

‘Whatever colour the next government is, we’ll be heading into a winter still heavily dependent on volatile gas markets, going backwards on our energy independence,’ Jess added. ‘The cost of living, driven in part by energy bills, and the UK’s energy security may well be key election issues – so how the parties choose to tackle them will likely be in the spotlight.’

According to analysts, the price cap is expected to increase slightly in October before falling again in January 2025. Experts at the consultancy Cornwall Insight forecast July’s cap would be £1,574 a year.

Last year energy bills reached their peak when the cap hit £4,279 but the government subsidised bills to keep them at £2,500. During this period, statistics show that there were an estimated 13% of households – 3.17 million – in fuel poverty in England, with the majority having to decide between basic essentials such as food or having to pay their bills.

Image: Myko Makhlai

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