Household energy bills are set to fall from the 1st July
Ofgem is lowering its energy price cap from the current £3,280 per year to £2,074 for the average household in England, Wales and Scotland, it has announced this morning
The announcement means that, for the first time since the global gas crisis took hold more than 18 months ago, prices are falling for customers on default tariffs. The savings can now be passed on to customers more quickly, thanks to Ofgem now updating the price cap quarterly rather than every six months.
At its peak, the price cap reached £4,279 and, whilst today’s level is lower than last quarter, it is still above the levels it was before the energy crisis took hold, meaning many households could still struggle to pay bills.
While the price cap has dropped from its winter peak, it remains well above the pre-2021 average, and many people will still find such high bills difficult to pay.
Earlier this year, Ofgem CEO Jonathan Brearley highlighted that many households continue to struggle to afford their energy bill – therefore more focus will be needed for government, the regulator and the industry to support the most vulnerable groups this winter.
Brearley said:
“After a difficult winter for consumers it is encouraging to see signs that the market is stabilising and prices are moving in the right direction. People should start seeing cheaper energy bills from the start of July, and that is a welcome step towards lower costs.
“However, we know people are still finding it hard, the cost-of-living crisis continues and these bills will still be troubling many people up and down the country. Where people are struggling, we urge them to contact their supplier who will be able to offer a range of support, such as payment plans or access to hardship funds.
“In the medium term, we’re unlikely to see prices return to the levels we saw before the energy crisis, and therefore we believe that it is imperative that government, Ofgem, consumer groups and the wider industry work together to support vulnerable groups. In particular, we will continue to work with government to look at all options.”
“ The announcement today that the price cap will fall to £2,074 from July marks the welcome shift when falling wholesale gas prices at last feed through to falling household energy bills.” says Emily Fry
Economist Resolution Foundation
“Expected energy costs for a typical household this year are now on course to be around £2,100 – still up by almost 80 per cent on what families were used to pre-crisis.
“A return to the level of bills households paid pre-crisis isn’t arriving anytime soon. The case for developing more sustainable support with energy bills, such a social tariff for vulnerable households, therefore remains strong.”
