Consumers will see a huge drop in their energy bills from April, as Ofgem announced a big reduction in the energy price cap.
The Price Cap changes every three months and has been falling over the course of 2023.
The cap shot up in January though, with the average home paying £1,928 a year for a typical dual-fuel household paying by direct debit – an average increase of five percent per household.
But today’s announcement will see prices fall back to their lowest level in two years.
The unit price for electricity is falling by 14 percent, while gas is going down by 19 percent.
Standing charges are increasing though, with electricity increasing by 13 percent a day and gas by six percent a day.
It means someone paying £500 a month for electricity will see their bill drop by 18 percent, and someone paying £500 a month for gas will see it drop by 14 percent.
You can see an estimate as to how much your bill will increase from April using our energy bills calculator:
While today’s price cap announcement shows that energy prices will fall from April 1, charity Independent Age noted that bills will still be around 60 percent higher than they were in 2021.
The charity’s chief executive, Joanna Elson CBE, said: “Millions of people across the country are still struggling to afford their energy bills including older people living on a low income. Our helpline continues to hear from frightened and anxious people who are being forced to make drastic cutbacks such as washing less or sitting in darkness. This is not acceptable.
“Gas unit costs are still 73 percent higher than they were in winter 2020/21 and electricity unit costs are up by nearly 100 percent. Older people living in financial insecurity, who are often reliant on a fixed income, cannot keep up with these increases. In the long term, people living in poverty, or on the edge, need reassurance that they will be shielded from high energy prices.”
Ms Elson suggested: “The UK Government must introduce an energy social tariff for those most in need, including people aged 65 and over on a low income and those who have high energy consumption due to long-term conditions or disabilities.
“This sustainable solution would offer protection for people in later life living on low incomes. With the Spring Budget approaching, now is the time for action.”
Energy UK, the trade association for the energy industry, supports the calls for more support for households “now and on an enduring basis”, and said the Chancellor’s Spring Budget provides an “opportunity” to introduce this.
A statement from Energy UK reads: “Energy debt has risen to record levels of around £2.9billion even across the warmer months. Many paying customers are already facing costs of well over £100 per year to cover the cost of energy used by others but not paid for. Indeed, the number of UK households failing to pay energy bills has jumped nearly 40 percent compared with a year ago with nearly 5.3 million in debt to their supplier.
“Going forward, with bills expected to remain significantly above pre-crisis levels for the rest of this decade, the need for additional Government-funded energy bill support is still prevalent.”
However, it noted that support must be targeted to ensure it reaches “the right households” and is “fair value” to the taxpayer.
