Gas and electricity prices have fallen, and though bills have reduced, they are predicted to increase once more in October.
The new price cap for England, Wales, and Scotland implemented by regulator Ofgem went into effect on Monday, July 1, resulting in a yearly drop of £122 in the average household’s energy bill.
As a result, a typical household’s average annual cost of gas and electricity is reduced to £1,568 – the lowest level in the past two years.
It’s not all good news, though, as forecasters expect bills to rise again in the run-up to winter.
Expert Insights on the Impact
According to eminent consultant Cornwall Insight, an average household’s annual cost will rise by £155, or roughly around 10%, by October.
“Modest falls in summer look set to be wiped out by bigger rises in autumn, when people will need to put the heating back on,” said Adam Scorer, chief executive of the charity National Energy Action.
“The cost of energy remains an unaffordable luxury that many of the poorest simply cannot afford.”
Ofgem Cap Affects All Households
The cap, set by Ofgem, limits the maximum price that can be charged for each unit of gas and electricity, not the total bill. This means the more gas and electricity you use, the more you pay, rather than reducing the overall total bill by a set amount, affecting all households regardless of occupancy, size, or income.
Affecting the gas and electricity bills of 28 million households, those on prepayment metres, who tend to top up metres during the colder, darker months and are often under more financial pressure, will see a less immediate impact of a drop in prices in the summer.
Experts suggest that if you do use metres, take a metre reading now to ensure you are charged at the correct rate.
Energy Price Change in Brief
The new prices that took effect from July to the end of September mean:
- Gas prices are now capped at 5.48p per kilowatt hour (kWh), and electricity at 22.36p per kWh.
- A typical household uses 2,700 kWh of electricity a year and 11,500 kWh of gas.
- Standing charges, a fixed daily charge covering the costs of connecting to a supply, are unchanged at 60p a day for electricity and 31p a day for gas, although they vary by region.
- Experts expect bills to rise again in the run-up to winter.
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