ENERGY bills are set to fall by up to £426 for millions of households this summer.
The energy regulator confirmed the new price cap, which comes into effect on July 1, this morning.
Energy bills are set to fall by £XXX from July 1PA
The Ofgem price cap has fallen by £426 to £2,074 a year and it will cover the period to October 1.
While this may come as a welcome relief, campaigners have said bills in July will be comparable to those seen last winter.
This is because the government’s support schemes have come to an end.
Plus, bills are almost double the level of October 2021, when a typical household paid £1,271 a year.
The price cap briefly reached £4,279 in January, with the pandemic and Russia’s war in Ukraine both pushing up wholesale prices.
But households were shielded from this by the government’s Energy Price Guarantee.
This limits annual energy costs to £2,500 for the average household – below Ofgem’s price cap.
This will end in July when the price cap falls.
The Government’s £400 winter discount to every household, paid in six instalments, also ended in March.
From October 2022 to March 2023, the government provided £67 a month for six months to subsidise energy bills.
National Energy Action says it means, in real terms, there is no reduction in bills.
It also warned that approximately 6.5million households will still be in fuel poverty.
MoneySavingExpert (MSE) founder Martin Lewis said a drop in the price cap is unlikely to make up for this support.
For the four million households on pre-payment meters, prices will be the same as that for customers on direct debits from July 1.
Prepayment meters are disproportionately used by vulnerable and low-income customers. but they typically pay £45 extra a year for energy.
However, Chancellor Jeremy Hunt announced a shake-up of the rules in the Spring Budget earlier this year.
The energy price cap, set by the regulator Ofgem, limits the maximum suppliers can charge customers for each unit of gas and electricity on the standard variable tariff.
The price cap does not protect customers from wholesale prices.
This means it’s not a cap on how much you can be charged for the energy that you use.
So if you use more energy than the typical households you should expect to pay more.
If you use less energy than the typical household you could pay less than the price cap.
If you’re on a fixed deal then you don’t need to do anything right now and you won’t see a change in your bill until your deal ends.
Can I get help with my energy bills?
Yes, energy suppliers do offer support for those who are struggling to pay their bills.
Those on Universal Credit and older legacy benefits are also entitled to cost of living payments worth up to £1,350.
There are plenty of energy grants and schemes open to help you out if you’re struggling.
Ask your supplier what’s on offer and how to apply, or check here:
British Gas Energy TrustBulb energy fundEDF’s energy customer support fundE.on’s energy fundNpower’s energy fundOvo’s debt and energy assistanceScottish Power’s hardship fund
There’s a one-off fuel voucher from your energy supplier if you’re on a prepayment meter.
Councils are also dishing out hundreds of pounds to hard-up families through the Household Support Fund.
If you’re in debt there are plenty of services you can take advantage of and they offer free and friendly advice on how to manage debt.
Most of them can offer you free guidance and help in person, over the telephone or online.
Money Advice Service – 0800 138 7777Citizens Advice – 0808 800 9060StepChange – 0800 138 1111National Debtline – 0808 808 4000
They can also help you take the next steps if you need a debt management plan (DMP) to tackle your debt or an Individual Voluntary Arrangement (IVA).
These are agreements for managing multiple debts.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]