MILLIONS of people could see their energy bills drop by £450 a year from as soon as the summer.
Experts have predicted that high energy costs will drop in July.
Households could soon save hundreds of pounds a year on energy billsPA
Those at Cornwall Insight envisage the new price cap to be £2,053 a year for the typical household.
This is £1,227 cheaper than the price cap from April which was set at £3,280 by Ofgem.
The regulator set this year’s April to June down from a peak £4,279 last winter.
Household bills were then further capped at £2,500 under the energy price guarantee, with the Government paying the difference to firms.
Bills will still remain much higher than in 2020, when the price cap was just £1,042 a year.
The price cap is changed four times a year by Ofgem and goes up or down depending on the wholesale price of gas and electricity.
Ofgem is announcing what the July price cap will be before the end of this month.
Currently, consumers are not directly impacted by the price cap due to the Energy Price Guarantee (EPG), which limits a typical household’s energy bill to £2,500 equivalent per year.
However, starting from July, household bills will revert to the price cap.
Dr Craig Lowrey, principal consultant at Cornwall Insight said: “As many people continue to suffer from the cost-of-living crisis, this will hopefully bring some cautious optimism that the era of exceptionally high energy bills is behind us.
“That is unfortunately where the good news ends. While bills are falling, the cap is still expected to remain comparatively high against historic norms, and those hoping to see a return to the kinds of bills seen at the start of the decade will be disappointed.
“Regrettably, it looks as if these prices may become the new normal.”
He said these predictions call into question the cap’s purpose and its continued place in the energy market.
“While it has provided some level of protection for consumers against market volatility, it is clearly still not shielding the most vulnerable from enduring severe financial hardship.”
How else can I lower my energy bills?
Depending on your circumstances, you might be entitled to a cost of living payment to help cover the cost of everyday essentials such as energy bills.
There are three payments in total, worth £900, £150-£300 and £150 which are being paid between now and Spring 2024.
Plus, you might be able to get help via the Household Support Fund – which was recently extended until March 2024.
What help you can get depends on where you live, as it is being distributed by local councils.
But, most of the time it comes in the form of a direct bank transfer or vouchers.
You should check with your local council to see if you are eligible for any help.
If you don’t know what local council area you fall under, you can use the Government’s council locator tool.
But, for the time being, the best thing to do is cut back your costs.
You can do this by ditching energy guzzling “vampire appliances” such as tumble dryers.
Plus, getting rid of any old halogen lightbulbs and opting for LED ones could save you around £55 a year.
And keeping your showers down to four minutes can help slash energy bills and bring down water bills by £95 a year.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]