The typical household energy bill should fall by £129 to £1,720 per year when regulator Ofgem’s new price cap comes into force, experts predict.
Household energy bills are set to fall by around 7% in July, new forecasts show (Image: Getty)
Brits’ household energy bills look set to fall by about 7% in July in a boost for customers of providers such as British Gas, EDF, OVO and Octopus. In their latest forecast, experts at Cornwall Insight predict the typical household energy bill should fall by £129 to £1,720 per year when regulator Ofgem’s new price cap comes into force.
The regulator, which sets the limit on what energy companies can charge customers, is set to confirm its latest price cap on Friday (May 23). After three consecutive bill increases, the price cap is currently set at about £1,849 for a typical household.
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It is set to fall after US President Donald Trump‘s aggressive tariff plans led to a significant slump in gas and oil prices. However, the forecast is slightly reduced from a previously predicted 9% drop after trade tensions eased in recent weeks.
Cornwall Insight said on Monday (May 19) that it expects the reduced price cap to be followed by a “modest drop” in October and another similar dip in January next year.
Craig Lowrey, Principal Consultant at Cornwall Insight, said: “The fall in the price cap is a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs.
“It’s a step in the right direction, but it should be taken in context. Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis.”
He said bills remain well above the levels seen at the start of the decade and there remains a risk energy will remain unaffordable for many.
Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets.
The energy price cap was introduced by the previous Conservative Government in January 2019.
It sets a maximum price energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use.
However, the cap doesn’t limit total bills, because householders still pay for the amount of energy they consume.
Anyone falling behind with their energy bills and struggling to pay should contact their supplier as soon as possible.
Under Ofgem’s rules, suppliers have to help their customers. This usually involves negotiating a payment plan.
Suppliers can offer a number of options, including a full payment plan review, affordable debt repayment plans and payment breaks.
They can also suggest payment reductions, more time to pay and access to hardship funds.
The help available is decided on a case-by-case basis, but repayment has to be based on a customer’s ability to pay.
