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| Version 114 | Version 115 |
|---|---|
| What is the Ofgem energy price cap for gas and electricity bills? | |
| (8 days later) | |
| Gas and electricity bills will fall by an average 7% in England, Scotland and Wales on 1 July. | |
| The new energy price cap means the typical annual bill paid by direct debit will fall to £1,568 per year. | |
| However, while bills will be at their lowest for two years, they remain about £400 higher than three years ago. | |
| What is the energy price cap? | What is the energy price cap? |
| The energy price cap covers 28 million households in England, Wales and Scotland and is set every three months, external by the energy regulator Ofgem. | |
| 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. |
| From 1 July until 30 September, gas prices will be capped at 5.48p per kilowatt hour (kWh), and electricity at 22.36p per kWh. | |
| 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 said that from 1 July, a household using a typical amount of energy and paying by direct debit, external for dual gas and electricity would pay £1,568 per year. | |
| That is a fall of £122 compared to the annual bill on charges between April and June. | |
| Those who pay their bills every three months by cash or cheque will pay more, with a typical bill of £1,668 a year. | |
| What is a typical household? | What is a typical household? |
| Your energy bill depends on the overall amount of gas and electricity you use, and how you pay for it. | Your energy bill depends on the overall amount of gas and electricity you use, and how you pay for it. |
| The type of property you live in, how energy efficient it is, and how many people live there, are also relevant. | The type of property you live in, how energy efficient it is, and how many people live there, are also relevant. |
| The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single contract for gas and electricity, which they pay 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 with a single contract for gas and electricity, which they pay 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. | |
| In March, Ofgem said it was considering a range of options for changing the current energy cap system. | In March, Ofgem said it was considering a range of options for changing the current energy cap system. |
| What is happening to prepayment customers? | What is happening to prepayment customers? |
| From 1 July households on pre-payment meters will pay slightly less than those on direct debit, with a typical bill of £1,522. | |
| Since April they have paid the same as those on direct debit, but were previously 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. | 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 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 - are unchanged. | |
| Standing charges are 60p a day for electricity and 31p a day for gas, although they vary by region. | |
| Ofgem said tens of thousands of customers responded to its recent consultation about how standing charges work. | |
| The regulator is also adding £28 to everyone's bill over the year to cover the cost of dealing with £3.1bn of debt that customers owe to suppliers. | |
| Should I fix my energy prices? | Should I fix my energy prices? |
| The fall in energy prices raised hopes that suppliers would offer cheaper, fixed-price deals. | The fall in energy prices raised hopes that suppliers would offer cheaper, fixed-price deals. |
| These offer certainty for a set period, but if prices drop further, people could find themselves stuck at the higher price. | These offer certainty for a set period, but if prices drop further, people could find themselves stuck at the higher price. |
| Analysts at the consultancy Cornwall Insight have forecast a rise in the typical bill to £1,762 in October, staying at that level in January. However, forecasts are not always correct and may change owing to events. | |
| When considering switching to 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 switching to 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. | 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 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, external, which the government introduced to help vulnerable households with costs in September 2021, had been due to end in March 2024. | |
| However, Chancellor Jeremy Hunt announced a six-month extension in the spring Budget. | However, Chancellor Jeremy Hunt announced a six-month extension in the spring Budget. |
| The Warm Home Discount scheme, external continues to offer a discount to eligible pensioners and low income households. | The Warm Home Discount scheme, external continues to offer a discount to eligible pensioners and low income households. |
| The government's Fuel Direct Scheme, external can help people to repay a debt from their benefit payments. | The government's Fuel Direct Scheme, external 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. |
| The energy support scheme for businesses, which offered firms a discount on wholesale prices, ended in March. | |
| What can I do if I can't pay my energy bill? | What can I do if I can't pay my energy bill? |
| 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, external | Ofgem: Help with bills, external |
| Ofgem: Help with bills, external | Ofgem: Help with bills, external |
| Related Topics | Related Topics |
| Budget 2024 | 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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