ENERGY bills are set to fall again later this year bringing new hope to millions of financially squeezed households.
Gas and electricity bills are expected to fall again, to below £2,000 a year from October.
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Experts at Cornwall Insight have released an updated forecast which predicts the average household will save a further £96 a year.
The new figures come just days before energy bills are set to drop by £426 a year from Saturday, July 1.
The change means the average energy customer will go from paying £2,500 a year to £2,074 from this weekend.
From this point, Ofgem’s Energy Price Cap will come back into force as the Government’s Energy Price Guarantee expires.
The cap sets a maximum limit on what suppliers can charge customers per unit of electricity and gas – so if you use more energy than the typical household expect to pay more.
But it’s important to understand that Ofgem’s energy price cap will be reviewed again later this year in October.
The regulator used to set the price cap every six months. But since August last year, it now reviews the cap every three months.
So prices will again change in January 2024.
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Cornwall Insight is now predicting that average bills will fall from £2,074 a year to 1,978 a year from October.
Again, it then expects bills to creep up slightly to £2,004 a year from January 2024 but stay below average prices issued under Ofgem’s July 2023 price cap.
But it’s important to note that these predictions relate to the expected cost for those on a duel fuel tariff who pay by direct debit.
Prepayment meter customers will start paying similar rates to those who pay by direct debit from July.
This is following the government’s decision to end the “prepay premium” which used to mean that these customers paid substantially more.
However, those who pay on receipt of their bill via credit, debit card, cheque or standing order will still pay higher gas and electricity rates to take into account higher supplier processing costs.
Dr Craig Lowrey, principal consultant at Cornwall Insight said: “The fall in the average price cap predictions reflects Ofgem’s efforts to align with the evolving energy consumption patterns of typical households as consumers respond to high prices by reducing their energy usage.
“While typical household predictions may provide some insight for consumers, households are still facing the challenge of bills that are well above historic levels.
“In light of this, it becomes crucial to explore alternative measures that can better protect consumers, promote fair competition, and ensure affordable and transparent energy pricing for all.
“The exploration of options such as social tariffs, energy efficiency initiatives, and various other avenues should be prioritised.”
The frequency of price cap changes might encourage some households to sign up to a new fixed energy deal.
Natalie Mathie, energy expert at Uswitch.com said: “Relying on the price cap means that your energy costs can go up or down every three months, so some households may value the certainty of locking in a fixed deal.”
We’ve previously explained which suppliers are offering new and existing customers the chance to fix their bills.
How can I get help with my energy bills?
Millions are also in line to receive cost of living payments worth up to £1,350.
The first instalment of the £900 payment has been paid to millions on certain benefits, including Universal Credit and Pension Credit.
Meanwhile, a £150 payment is currently being issued to millions with disabilities.
Plus, pensioners who are entitled to a Winter Fuel Payment for winter 2023/24 will get an extra £150 or £300 paid on top of their normal payment later this year.
Energy suppliers also offer plenty of energy grants and schemes to help you out if you’re struggling.
Here’s a list of schemes open right now:
- British Gas Energy Trust Individuals and Family Fund
- EDF Customer Support Fund
- E.ON and E.ON Next Grants
- Octopus Energy Assist Fund
- Ovo Energy
- Scottish Power Hardship Fund
There’s a one-off fuel voucher from your energy supplier if you’re on a prepayment meter.
