Energy bills to fall from April as price cap drops to lowest level in two years
23 February 2024, 07:03 | Updated: 23 February 2024, 07:32
Energy bills will fall sharply from April after the price cap was dropped to its lowest level in two years.
Listen to this article
Loading audio...
Ofgem announced on Friday morning that the price cap for a typical duel-fuel household would drop by 12.3% for the period from April-June this year.
That equates to an annual bill of £1,690, or a drop of £238, from the current cap, which was previously set at £1,928 per year for a typical household. That works out at a saving of around £20 per month.
The price cap sets a maximum rate per unit that can be charged to customers for their energy use, but not the total bill. That means if you use more, you will pay more.
It comes as energy prices reach their lowest level since Russia’s invasion of the Ukraine in February 2022 caused a in the wholesale energy market, driving up costs for suppliers and customers.
But prices are still considerably higher than they were a few years ago. The latest price cap is 28% higher than in the winter of 2021-2022.
Ofgem's price cap affects 29 million households in England, Wales and Scotland. Northern Ireland sets its own prices, which are also falling.
Ofgem chief executive Jonathan Brearley said: "This is good news to see the price cap drop to its lowest level in more than two years - and to see energy bills for the average household drop by £690 since the peak of the crisis - but there are still big issues that we must tackle head-on to ensure we build a system that's more resilient for the long term and fairer to customers.
He added that "longer term we need to think about what more can be done for those who simply cannot afford to pay their energy bills even as prices fall.
"As we return to something closer to normality we have an opportunity to reset and reframe the energy market to make sure it's ready to protect customers if prices rise again."
Energy Security Secretary Claire Coutinho said: "Today's announcement that energy bills will fall by £238 on average will be welcome news for families across the country. This means households will be paying the lowest cost for their energy since Putin's illegal invasion of Ukraine two years ago.
"My mission is to cut costs and get bills even lower so that families can spend their money on the things that matter most to them. Today we're announcing further measures to slash bills for families and improve access to cheaper, flexible deals.”
