Many households have been feeling the pinch of high energy costs, but relief is finally here. Energy prices have dropped to their lowest level in two years, thanks to the latest price cap
implemented by regulator Ofgem. However, experts caution that despite this welcome decrease, energy bills still remain relatively expensive.
The average annual bill for a household using a typical amount of gas and electricity has decreased by £238, now totaling £1,690 under Ofgem's latest price cap. While this reduction is good news for consumers, advisers emphasize the importance of maintaining energy-saving habits to keep bills manageable.
Ofgem's quarterly price cap affects 29 million households in England, Wales, and Scotland. Gas prices are now capped at 6p per kilowatt hour (kWh), and electricity at 24p per kWh. However, it's essential to note that the cap sets the maximum amount suppliers can charge for each unit of gas and electricity, not the total bill. So, households using more energy will still pay more.
While the drop in energy prices is significant, bills remain above pre-pandemic levels, and some government financial support has expired. Many customers find themselves in arrears totaling £3 billion, highlighting the ongoing financial strain caused by high energy costs.
For individuals like Caz Aubrey, who struggled to cover rent and other household expenses during the winter, managing energy usage has been crucial. Despite her efforts to minimize energy consumption, Aubrey still faced financial challenges. However, she remains hopeful that the recent price drop will make bills more manageable moving forward.
Energy-saving tips can further alleviate financial burdens. Sarah Osborn, from Social Enterprise Kent, estimates that households could save up to £270 a year with practical tips. These include adjusting boiler settings, managing draughts, and limiting shower time.
While the current price drop offers relief, future energy bills may fluctuate. Forecasts suggest bills could decrease in the summer before rising again in the winter. Ofgem is exploring potential changes to the energy price cap to adapt to evolving consumer behaviors, such as increased adoption of electric vehicles and renewable energy sources.
Overall, while the recent decrease in energy prices is a welcome change for consumers, maintaining energy-saving habits remains crucial for managing bills effectively in the long term. Photo by Dmitry G, Wikimedia commons.