As of July 1, 2023, energy prices in England, Scotland, and Wales have decreased by 7%, with the typical annual dual-fuel bill paid by direct debit now standing at £1,568 per year. This represents a reduction of £122 from the previous price cap. The energy price cap, set by the energy regulator Ofgem, affects 28 million households and is adjusted every three months. It limits the maximum price that can be charged for each unit of energy on a standard or default tariff for a typical dual-fuel household. The cap does not apply to Northern Ireland, which has its own energy market, but prices are also falling there.
The typical household, as defined by Ofgem, uses 11,500 kWh of gas and 2,700 kWh of electricity annually. Standing charges, which are a fixed daily amount covering the costs of connecting to a supply, have remained unchanged at 60p a day for electricity and 31p a day for gas.
Prepayment customers are now paying slightly less than those on direct debit, with a typical bill of £1,522, a drop of £121. New rules have been introduced to protect customers from being switched to prepayment meters without proper consideration.
The government has extended the Household Support Fund, which provides assistance to vulnerable customers, for an additional six months. The Warm Home Discount scheme and the Fuel Direct Scheme also offer financial help with energy bills.
For businesses, the energy support scheme that offered discounts on wholesale prices ended in March 2024.
Individuals struggling to pay their energy bills can seek help from their suppliers, who are required to offer affordable payment plans or repayment holidays. Suppliers also provide hardship grants to eligible customers.
Leading consultancy Cornwall Insight predicts a typical household’s annual bill will increase to £1,723 in October, a £155 increase from the current price. This forecast may influence consumers’ decisions on whether to fix their energy prices.
Overall, while the reduction in energy prices is welcomed, bills remain significantly higher than they were three years ago, and many households continue to face financial challenges in managing their energy costs.