Details of the next energy price cap have been released, and it’s a welcome relief for millions of households. From July, the maximum unit price cap will drop by 7%, leaving a bit more cash in your pocket over the summer months.
Have your say! How have you coped under the latest period of high energy prices? Have you changed how you live in order to get through it? Comment below, and join in on the conversation.
The price cap determines the maximum amount you can be charged per unit of energy, not your total bill. The quantity of energy units you consume is under your control, so reducing usage or being more efficient with your gas and electricity can lower your bill.
Every three months, the energy regulator, Ofgem, adjusts the energy price cap based on the cost of power production. This 7% decrease will come into effect from July and last until September, with details about the subsequent cap to be announced in due course.
For the average dual fuel household paying by direct debit, their annual energy bill will drop from £1,849 to £1,720 starting from July – a saving of £129, according to the Mirror. The price cap for those paying via pre-payment meter will fall from £1,803 annually to £1,672, while the yearly charge for those who pay upon receipt of the bill will decrease from £1,969 to £1,855.
Despite this positive news, the shadow of the last three periods of rising energy bills still looms. The price cap increased by 10% last October, 1.2% in January this year, and then by 6.4% last month.
Tim Jarvis, Director General of Markets at Ofgem, expressed: “A fall in the price cap will be welcome news for consumers, and reflects a reduction in the international price of wholesale gas.
“However, we’re acutely aware that prices remain high, and some continue to struggle with the cost of energy. The first thing I want to remind people is that you don’t have to pay the price cap.
“There are better deals out there so it’s important to shop around, and talk to your existing supplier about the best deal they can offer you. And changing your payment method to direct debit or smart pay as you go can save you up to £136.”
Have your say! How have you coped under the latest period of high energy prices? Have you changed how you live in order to get through it? Comment below, and join in on the conversation.
