Gas and Electricity Prices Fall by 7% in England, Scotland, and Wales on 1 July: What You Need to Know:

Many British households have been worried about high energy bills, but there's some good news. Starting this Sunday, the average annual dual-fuel energy bill in Britain will drop to under £2,000 for the first time since April 2022, all thanks to a new lower cap.

No More £400 Universal Bill Subsidy This Year

Unfortunately, this year won't bring back the £400 universal bill subsidy. Groups like the End Fuel Poverty Coalition caution that the ongoing cost of living crisis will continue to make energy bills challenging this winter.

What's Changing with the Price Cap in October

On October 1st, Ofgem is reducing the price cap for households in England, Wales, and Scotland to £1,834 a year for a typical annual dual-fuel energy bill, down from the previous £2,074.

Understanding the Cap Adjustment

A big part of this price drop is because Ofgem is changing how it figures out the average household's gas and electricity usage. Using the old method, the cap would only go down by 7%, or £151, to £1,923 a year. For folks with prepay meters or those who pay by cash or cheque, the numbers are a bit higher at £1,949 and £2,052, respectively.

Will You Pay No More than £1,834 This Year?

Not necessarily. The cap sets the most a supplier can charge for each unit of energy and the highest daily standing charge. Your actual bills might be higher or lower depending on your energy use, which might not be the same as the average.

Cap Changes Every Three Months

Keep in mind that the Ofgem cap changes every three months. Some predictions suggest it might go up to £1,898 for a typical home starting in January.

How the Cap Works

Back in 2019, the cap was created to protect customers using standard variable or "default" tariffs. It made sure you wouldn't be overcharged just because you stuck with the same supplier. However, things have changed with the energy crisis, and many suppliers went out of business.

Protection for Prepayment Meter Customers

Around 4 million customers with prepayment meters are protected by the cap, but it's a bit higher than for folks who pay directly. The government is working to make it more even until April 2024 and plans to get rid of the difference after that.

Heat Network Customers: What You Need to Know

If you live in flats with shared heating systems, the cap doesn't apply because it's seen as commercial, not domestic. But companies running these networks can get help with costs through the government's energy bill discount plan, and those savings should be passed on to you.

Available Help for Those in Need

This year, there won't be a £400 energy support for everyone. Instead, the government is giving cost of living payments to about 8 million vulnerable households. This includes £900 for people on means-tested benefits, £300 for pensioners, and £150 for disabled individuals. If you're facing challenges, get in touch with your supplier to chat about a payment plan or explore options like energy grants.