British Queen celebrates


The anticipated annual energy bill for households is set to decrease to £1,690 from April, marking the lowest level in two years under the new regulatory price cap.

This reduction translates to a yearly savings of £238, or approximately £20 per month, for households consuming a typical amount of energy.

The decline in wholesale prices paid by suppliers has prompted the adjustment in the price cap for April to June, offering some relief to consumers.

However, advocacy groups caution that despite these reductions, energy bills remain burdensome for many households.

Energy prices have now reached their lowest point since Russia's full-scale invasion of Ukraine in February 2022. Nevertheless, even with the forthcoming decrease in April, energy bills will still exceed pre-pandemic levels.

The regulatory price cap, which applies to 29 million households across England, Wales, and Scotland, dictates the maximum amount suppliers can charge for each unit of gas and electricity. However, the total bill may vary depending on individual consumption.

Key points regarding the price cap in England, Wales, and Scotland include:

Gas prices will be capped at 6p per kilowatt-hour (kWh), while electricity will be capped at 24p per kWh. This compares to the current rates of 7.42p per kWh for gas and 28.62p per kWh for electricity. Households using prepayment meters will experience slightly lower bills than those using direct debit, with a typical annual bill of £1,643. Customers paying their bills every three months via cash or cheque will face higher costs, with a typical annual bill of £1,796. Standing charges, fixed daily charges covering connection costs, have increased to 60p per day for electricity and 31p per day for gas, although they vary by region. Additionally, the regulator will add £28 to each customer's annual bill to cover the cost of addressing the £3.1 billion debt owed by customers to suppliers.

Energy providers will inform customers of the new prices before April. However, adjustments to direct debit payments may depend on whether customers maintain a surplus balance with their energy supplier. Customers who believe they are overpaying are encouraged to contact their supplier to discuss reducing payments.

While the decrease in energy prices offers some relief, households like that of Sam, a mother from Greater Manchester, and her sons Reuben, eight, and Jenson, 10, have been diligently reducing energy usage to control costs.

Although lower prices will alleviate some financial strain, Sam emphasizes the importance of continued energy-saving practices.

The decline in energy prices may also spur competition among suppliers, potentially leading to improved deals for consumers.

Jonathan Brearley, CEO of Ofgem, notes that by April, the average household's energy bills will have decreased by £690 since the peak of the crisis. However, he acknowledges the need to address systemic issues to ensure a more resilient and equitable energy system.

With ongoing discussions surrounding support for households facing financial challenges, the government's approach to addressing energy costs remains under scrutiny.