Britain’s energy price cap cut: how the changes affect you
Around 27 million households face slightly lower energy bills this summer after Great Britain’s energy regulator, Ofgem, cut the price cap on gas and electricity to £2,074 from July.
The cap has fallen sharply from £3,280 over the last three months, down from highs of over £4,000 in the three months before that. But most households will feel little relief after the government cancelled a number of schemes to make bills more affordable.
Experts have warned that energy costs could stay at unprecedented levels, with millions of households remaining in fuel poverty, until the end of the decade.
Usually Ofgem’s cap determines the bills for around 27 million households on standard energy tariffs by limiting the rate that suppliers can charge for each unit of gas and electricity. It reached £4,279 in the first months of the year, before reducing to £3,280 from April.
But households won’t feel the full effect of falling energy prices because the government helped reduce bills over the winter with its energy price guarantee.
The scheme limited the average household bill to £2,500 – well below the Ofgem cap. The government also gave every household £400, split into monthly payments between October and April, to reduce costs further. Both those schemes have now come to an end. The wholesale price has also fallen, allowing Ofgem to lower the cap. This means average annual bills will stay the same for most households from July.
No. Energy experts have predicted that Ofgem’s energy price cap, which is adjusted quarterly, is likely to remain at similar levels for the rest of the year. They also think bills could remain at unusually high levels for the rest of the decade.
Analysts at Cornwall Insight, an energy consultancy, say the price cap
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