- The Ofgem price cap is likely to fall by £293 a year in April, Cornwall Insight says
- Although any drop in energy bills is welcome, prices far outstrip pre-2021 levels
Energy bills will fall in April, experts think – but only by 15 per cent, or £293, to £1,635 a year.
The average home currently pays £1,928 a year for gas and electricity bills as they are on a tariff regulated by the Ofgem price cap, which is set four times a year.
But expert energy analysts at Cornwall Insight believe the price cap will fall to £1,635 a year from 1 April.
That rate applies to a home with average energy use, on a variable-rate energy tariff and paying by direct debit.
The current price cap sets the energy bills paid by more than 80 per cent of UK homes, though the exact amount varies depending on gas and electricity use.
Feed the meter: Energy bills have been high since late 2021, when prices began to skyrocket
The price cap is then reset in July and once again in October.
Cornwall Insight thinks the average gas and electricity bill will fall again to £1,465.07 in July, before rising to £1,523.95 in October.
Cornwall Insight principal consultant Craig Lowery said: ‘Forecasts show energy bills returning to their lowest levels in over two years, providing a much-needed respite for a nation struggling with a cost of living crisis.
‘Fairly healthy gas supply across the Atlantic, coupled with high storage levels in Europe, are helping to keep bills down. But we mustn’t get too complacent. Our energy system is still walking a tightrope, and we cannot be sure another political or economic crisis won’t send bills straight back up.
‘Even with the drop, prices will remain a struggle for many. We need to remember, bills remain hundreds of pounds above pre-pandemic levels, and if we don’t speed up the switch to sustainable energy and cut down on volatile imports, they are likely to stay that way.’
When will cheap fixed energy deals come back?
A big question for consumers is whether lower, more stable energy bills could encourage energy firms to bring back cheap fixed-rate deals.
Fixed-rate tariffs have historically been far cheaper than variable rates, but dried up once energy prices began soaring in late 2021.
While energy companies have started relaunching fixed rate energy deals, many are more expensive than staying on the price cap, or only available to existing customers.
Uswitch director of regulation Richard Neudegg said: ‘Prices are forecast to fall again in July, but the market remains unpredictable, and it is hard to know how energy rates will look when usage climbs again in winter.
‘With more than just a glimmer of hope on the horizon for wholesale energy costs, all eyes are now on suppliers to see how they will price their other deals.
‘Consumers have waited long enough for better tariff choices, and desperately need the opportunity to take advantage of cheaper rates.’