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| Version 109 | Version 110 |
|---|---|
| What is the Ofgem energy price cap and how much are bills going down? | What is the Ofgem energy price cap and how much are bills going down? |
| (8 days later) | |
| Energy bills will fall by more than 12% for most people in England, Scotland and Wales from April. | Energy bills will fall by more than 12% for most people in England, Scotland and Wales from April. |
| The latest price cap has been announced by energy regulator Ofgem, which sets the maximum price suppliers can charge households for each unit of gas and electricity they use. | |
| What is the energy price cap? | What is the energy price cap? |
| The energy price cap is set every three months and covers 29 million households in England, Wales and Scotland. | The energy price cap is set every three months and covers 29 million households in England, Wales and Scotland. |
| It fixes the maximum price that can be charged for each unit of energy on a standard - or default - tariff for a typical dual-fuel household which pays by direct debit. | It fixes the maximum price that can be charged for each unit of energy on a standard - or default - tariff for a typical dual-fuel household which pays by direct debit. |
| Gas prices will be capped at 6p per kilowatt hour (kWh), and electricity at 24p per kWh. Currently, gas is 7.42p per kWh and electricity 28.62p per kWh. | Gas prices will be capped at 6p per kilowatt hour (kWh), and electricity at 24p per kWh. Currently, gas is 7.42p per kWh and electricity 28.62p per kWh. |
| When prices soared after Russia invaded Ukraine in 2022, the government introduced a temporary Energy Price Guarantee to limit bills. However, Ofgem is again responsible for deciding how much customers can be charged. | When prices soared after Russia invaded Ukraine in 2022, the government introduced a temporary Energy Price Guarantee to limit bills. However, Ofgem is again responsible for deciding how much customers can be charged. |
| The cap does not apply in Northern Ireland, which has its own energy market. Prices are also falling there. | The cap does not apply in Northern Ireland, which has its own energy market. Prices are also falling there. |
| How much is my bill likely to go down? | How much is my bill likely to go down? |
| Ofgem says that, from April, an average household paying by direct debit for dual fuel (gas and electricity) will pay £1,690 a year, a drop of £238 from the previous cap. | |
| Should I fix my energy prices? | Should I fix my energy prices? |
| The fall in energy prices has raised hopes that suppliers will offer cheaper, fixed-price deals. | The fall in energy prices has raised hopes that suppliers will offer cheaper, fixed-price deals. |
| These offer certainty for a set period, but if prices drop further people can find themselves stuck at the higher price. | These offer certainty for a set period, but if prices drop further people can find themselves stuck at the higher price. |
| Analysts at Cornwall Insight predict the price cap will see a small fall in July, but increase slightly in October. | Analysts at Cornwall Insight predict the price cap will see a small fall in July, but increase slightly in October. |
| When considering a fixed-price deal, Ofgem says people should seek independent advice and "consider what is most important for them, whether that's the lowest price or the security of a fixed deal". | When considering a fixed-price deal, Ofgem says people should seek independent advice and "consider what is most important for them, whether that's the lowest price or the security of a fixed deal". |
| Price comparison website Uswitch says it expects "increased competition" from suppliers, but warns that people to check any exit fees if they want to leave a fixed deal early. | |
| What are standing charges and how are they changing? | |
| Although the overall cap has fallen, standing charges - a fixed daily amount which covers the costs of connecting to a supply - have increased. | Although the overall cap has fallen, standing charges - a fixed daily amount which covers the costs of connecting to a supply - have increased. |
| Standing charges will be 60p a day for electricity and 31p a day for gas, although they vary by region. | Standing charges will be 60p a day for electricity and 31p a day for gas, although they vary by region. |
| The regulator will also 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 regulator will also 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. |
| What is a typical household? | What is a typical household? |
| How much you pay for energy depends on the overall amount of gas and electricity you use. | How much you pay for energy depends on the overall amount of gas and electricity you use. |
| But the type of property you live in, how energy efficient it is, and how many people live there, also affect your bill. | But the type of property you live in, how energy efficient it is, and how many people live there, also affect your bill. |
| The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year and paying by direct debit. | The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year and paying by direct debit. |
| The vast majority of people pay their bill this way, to help spread payments across the year. | The vast majority of people pay their bill this way, to help spread payments across the year. |
| Those who pay every three months by cash and cheque are charged more. Their typical annual bill from April will be £1,796, which is £106 more a year than that of a direct debit customer. | Those who pay every three months by cash and cheque are charged more. Their typical annual bill from April will be £1,796, which is £106 more a year than that of a direct debit customer. |
| What is happening to prepayment customers? | What is happening to prepayment customers? |
| Households on prepayment meters will now pay the same as those on direct debit. Previously they were charged more. | Households on prepayment meters will now pay the same as those on direct debit. Previously they were charged more. |
| About four million households had prepayment meters in July 2023, according to Ofgem. | About four million households had prepayment meters in July 2023, according to Ofgem. |
| Many have been in place for years, but some meters were installed more recently after customers struggled to pay their bills. | Many have been in place for years, but some meters were installed more recently after customers struggled to pay their bills. |
| New rules mean suppliers must give customers more opportunity to clear their debts before switching them to a meter, and they cannot be installed at all in certain households. | |
| What support is available for energy bills? | What support is available for energy bills? |
| Certain groups - such as pensioners and those on some means-tested or disability benefits - received extra cost-of-living payments when bills soared. | Certain groups - such as pensioners and those on some means-tested or disability benefits - received extra cost-of-living payments when bills soared. |
| But much of that extra support has now finished. | But much of that extra support has now finished. |
| The £500m Household Support Fund, which the government introduced to help with costs in September 2021, had been due to end in March 2024. | |
| However, Chancellor Jeremy Hunt announced a six-month extension in the April Budget. | |
| The Warm Home Discount scheme continues to offer a discount to eligible pensioners and low income households. | |
| The government's Fuel Direct Scheme can help people to repay a debt from their benefit payments. | |
| In addition, energy suppliers must offer customers affordable payment plans or repayment holidays if they are struggling to pay bills. | In addition, energy suppliers must offer customers affordable payment plans or repayment holidays if they are struggling to pay bills. |
| Most suppliers also offer hardship grants. | Most suppliers also offer hardship grants. |
| What can I do if I can't pay my energy bill? | What can I do if I can't pay my energy bill? |
| Ofgem: Help with bills | Ofgem: Help with bills |
| What help are businesses getting? | What help are businesses getting? |
| The energy support scheme for businesses, which offered firms a discount on wholesale prices, will end in March 2024. | The energy support scheme for businesses, which offered firms a discount on wholesale prices, will end in March 2024. |
| The scheme offered a larger discount to heavy energy-using sectors, like glass, ceramics and steelmakers. | The scheme offered a larger discount to heavy energy-using sectors, like glass, ceramics and steelmakers. |
| Rising bills mean chip shop is not viable - owner | Rising bills mean chip shop is not viable - owner |
| Related Topics | Related Topics |
| Budget 2024 | |
| Energy customer switching | Energy customer switching |
| Ofgem | Ofgem |
| Personal finance | Personal finance |
| Energy industry | Energy industry |
| Cost of Living | Cost of Living |
| Oil & Gas industry | Oil & Gas industry |
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