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| What is the Ofgem energy price cap and how much are bills falling? | What is the Ofgem energy price cap and how much are bills falling? |
| (4 days later) | |
| Gas and electricity prices fell by 7% in England, Scotland and Wales on 1 July. | |
| Under the new energy price cap, the typical annual dual-fuel bill paid by direct debit is now £1,568 per year. | |
| However, while bills are at their lowest for two years, they remain about £400 higher than they were 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. | 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. |
| Between 1 July and 30 September, gas prices will be capped at 5.48p per kilowatt hour (kWh), and electricity at 22.36p per kWh. | Between 1 July and 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? |
| From 1 July, a dual-fuel direct debit household using a typical amount of energy, external will pay £1,568 per year, a drop of £122. | From 1 July, a dual-fuel direct debit household using a typical amount of energy, external will pay £1,568 per year, a drop of £122. |
| Typical bills for those who pay their bills every three months by cash or cheque have fallen by £129 to £1,668. | |
| 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. | Your energy bill depends on the overall amount of gas and electricity you use, and how you pay. |
| 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 settle 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 settle 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. | 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, including charging different prices throughout the day to reflect periods of high demand. | In March, Ofgem said it was considering a range of options for changing the current energy cap system, including charging different prices throughout the day to reflect periods of high demand. |
| What is happening to prepayment customers? | What is happening to prepayment customers? |
| From 1 July, households on prepayment meters are paying slightly less than those on direct debit, with a typical bill of £1,522, a drop of £121. | |
| Since April they have paid the same as those on direct debit, but were previously charged more. | 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 April 2024, according to Ofgem. | About four million households had prepayment meters in April 2024, according to Ofgem. |
| Many have been in place for years, but some were installed more recently after customers struggled to pay higher bills. | Many have been in place for years, but some were installed more recently after customers struggled to pay higher 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? | 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 staying the same. | Although the overall cap has fallen, standing charges - a fixed daily amount which covers the costs of connecting to a supply - are staying the same. |
| These are typically 60p a day for electricity and 31p a day for gas, although they vary by region. | These are typically 60p a day for electricity and 31p a day for gas, although they vary by region. |
| Campaigners, including the financial journalist Martin Lewis, have said these charges are unfair because they make up a disproportionately large part of the bill of low energy users. | |
| Ofgem said tens of thousands of customers responded to its recent consultation about how the charges work. | Ofgem said tens of thousands of customers responded to its recent consultation about how the charges work. |
| Listen: The Martin Lewis podcast - standing charges | Listen: The Martin Lewis podcast - standing charges |
| Listen: The Martin Lewis podcast - standing charges | Listen: The Martin Lewis podcast - standing charges |
| Separately, 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. | Separately, 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. |
| Leading consultancy Cornwall Insight predicts a typical household's annual bill will be back up to £1,723 in October, a £155, or 10%, increase from now. However, the reality may be different. | |
| When considering fixed-price deals, Ofgem says people should seek independent advice and consider what is most important for them - the lowest price or the security of a fixed deal. | When considering fixed-price deals, Ofgem says people should seek independent advice and consider what is most important for them - the lowest price or the security of a fixed deal. |
| Price comparison website Uswitch warned customers to check whether fixed deals had exit fees before signing up. | Price comparison website Uswitch warned customers to check whether fixed deals had exit fees before signing up. |
| What financial help is available for energy bills? | What financial help 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 after the pandemic. | Certain groups - such as pensioners and those on some means-tested or disability benefits - received extra cost-of-living payments when bills soared after the pandemic. |
| But much of that extra support has ended. | But much of that extra support has ended. |
| The £500m Household Support Fund,, external which was introduced in September 2021 to help vulnerable customers, had been due to end in March 2024. | The £500m Household Support Fund,, external which was introduced in September 2021 to help vulnerable customers, 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 an energy debt directly from their benefit payments. | The government's Fuel Direct Scheme, external can help people to repay an energy debt directly from their benefit payments. |
| In addition, suppliers must offer customers affordable payment plans or repayment holidays if they are struggling with bills. | In addition, suppliers must offer customers affordable payment plans or repayment holidays if they are struggling with 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 2024. | The energy support scheme for businesses, which offered firms a discount on wholesale prices, ended in March 2024. |
| 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 |
| Energy customer switching | Energy customer switching |
| Ofgem | Ofgem |
| Personal finance | Personal finance |
| Energy industry | Energy industry |
| Cost of Living | Cost of Living |
| The world explained | The world explained |
| Oil & Gas industry | Oil & Gas industry |