Energy bills may drop by up to 16 percent in April, according to the latest energy price cap forecast.
Energy market analysts Cornwall Insight have published its latest calculations based on market closing prices, which predicts average annual energy bills to fall from £1,928 to £1,620 for a typical duel-fuel household, a saving over more than £300.
Energy prices are then predicted to fall a further seven percent in July to average £1,497.15 a year, before marginally rising again in October to £1,541.72.
The price cap, which is set by energy regulator Ofgem, sets a limit on what suppliers can charge domestic consumers per kilowatt hour of energy used, and a limit on the standing charge (p/day) which covers the cost of supplying energy to the home.
Richard Neudegg, director of regulation at Uswitch.com, commented: “The prospect of the price cap falling further than expected in April is positive, but it’s little comfort for households struggling through the coldest time of year with high energy bills.
“These predictions suggest prices in April will be 16 percent lower than they are now, with the hope of a further seven percent drop in July.
“Consumers shouldn’t count their chickens yet, however, as the further into the future predictions look, the less certain they are, given the wholesale energy market can change quickly.
“No one will know for sure how much they will be paying in April until the new price cap level is announced in February, making it hard for households to budget in these challenging times.”
Mr Neudegg added: “We hope these predictions will encourage suppliers to bring back cheaper fixed deals. Ofgem should ensure it is encouraging suppliers to offer deals widely, and at competitive prices.”
The price cap is set for England, Wales and Scotland for each unit of gas and electricity. Energy in Northern Ireland is regulated separately.
When will the next energy price cap announcement be made?
The energy price cap is reviewed and updated every three months. The dates when the levels will be announced over the year are:
- April 1 to June 31, 2024 level, announced by February 23, 2024
- July 1 to September 31, 2024 level, announced by May 28, 2024
- October 1 to December 31, 2024 level, announced by August 27 2024.
Energy bill support
There is help available for people who are struggling to pay their energy bills.
Andy Kerr, founder at BOXT, said: “If you’re struggling to afford your energy bills, the first thing you should do is contact your energy supplier to discuss ways to pay them what you owe.
“Your energy supplier has to help you come to a solution but ensure you negotiate a deal that works for you and your monthly budget. If you have asked to set up a payment plan, this will include what you owe plus an amount for your current use.
“Your supplier must take into account how much you can afford to pay and how much energy you’ll use in future, so make sure you have your monthly income and outgoings on hand. Also send regular meter readings and or get a smart meter installed so your bill is always based on accurate usage rather than an estimate.
“This means you’re less likely to be overpaying and also don’t risk underpaying then getting a big catch-up bill further down the line.”
Mr Kerr added: “If you are struggling, remember there is help at hand. There are a number of grants and schemes available, with varying eligibility criteria. Your supplier should also be able to help you identify any hardship funds or grants you may be eligible for.”
Examples of hardship funds or grants people can get from the Government include:
- Winter Fuel Payment – for people born on or before 25 September 1956.
- Warm Home Discount – a £150 discount for some people getting Pension Credit or some people in low-income households.
For people who live in Scotland or Wales:
- Child Winter Heating Assistance – A £235.70 annual payment per disabled child and young person under 19 living in Scotland.
- Winter fuel support scheme – A £200 one-off payment for Welsh households in receipt of certain benefits.
