Will your home benefit from cheaper energy bills?

- Wed 05 Jun 2024

The energy price cap is the maximum amount energy suppliers can charge you for each unit of energy you use. It’s updated every three months by energy regulator Ofgem, to make sure that prices reflect changes in underlying energy costs, as well as inflation.

From the 1st July to 30th September 2024, Ofgem's energy price cap will decrease to £1,568, a 7% drop from the current £1,690 cap. This reduction means energy prices will be at their lowest since early 2022.

The new cap will benefit those on default or standard variable tariffs, including those paying by direct debit, standard credit, prepayment meter, or with an Economy 7 meter. If you have a fixed tariff, your payments will remain unchanged.

According to Rightmove below are the Payment Types and Changes -

Here’s a quick overview of the changes for the upcoming period:

Direct Debit: £1,568 (down £122)

Prepayment: £1,522 (down £121)

Standard Credit: £1,668 (down £129)

Economy 7: £1,037 (down £87)

Understanding Your Energy Usage -

Ofgem categorises households based on their energy usage:

Low Usage: Flat or 1-bed house with 1-2 people

Medium Usage: 2-3 bed house with 2-3 people

High Usage: 4+ bed home with 4-5 people

Energy usage is measured in kilowatt hours (kWh). One kWh powers a 100-watt lightbulb for 10 hours, while a tumble dryer cycle uses about 4.5 kWh.

Government Support and Schemes

The £400 Energy Bills Support Scheme from late 2022 to early 2023 has now ended, but other schemes like the Warm Home Discount Scheme still offer help. Please see the link below to other government schemes that offer help - https://www.gov.uk/get-help-energy-bills

Will there be a change to the standing charge on my bill?

The standing charge, a fixed daily cost to maintain your energy supply, varies by supplier and region. It’s used for network maintenance and other essential services.

From January to March 2024, the average daily standing charge for electricity was around 53p a day, and 30p a day for gas. That worked out at just over £300 a year on average. From April to June 2024, this has risen to 60p a day for electricity, and 31p a day for gas.

Will energy prices keep falling?

The energy price cap is revised every three months. While prices are decreasing now, experts suggest costs might rise again later this year.

For more detailed information and to understand your specific energy usage and costs, follow the recent Rightmove article below and for tips on how to save money - https://www.rightmove.co.uk/news/articles/property-news/average-uk-energy-bills-how-to-save-money/

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