Energy Bills to fall by £122 in July 2024

It has been announced that under the new price cap, a typical household’s energy bills will decrease by £122 a year from July 2024.

Energy Bills to fall by £122 in July 2024 fd

“The fall in the energy price cap reduces bills slightly."

A typical household’s energy bills will fall by £122 a year from July 2024 under the new price cap.

The newest quarterly cap for England, Wales and Scotland means a household using a typical amount of gas and electricity will pay £1,568 a year.

This means that bills will be the lowest for two years.

The cap limits the maximum price that can be charged for each unit of gas and electricity – not the total bill.

If more energy is used, you will pay more.

This will affect 28 million households but does not impact those in Northern Ireland, where the sector is regulated differently but where prices are also falling.

Energy prices are at their lowest level since Russia invaded Ukraine in February 2022.

But energy bills remain well above pre-pandemic levels and are approximately £400 higher than three years ago.

An estimated £3 billion debt to suppliers has been built up by consumers when prices were high.

Dame Clare Moriarty, chief executive of Citizens Advice, said:

“The fall in the energy price cap reduces bills slightly.

“But our data tells us millions have fallen into the red or are unable to cover their essential costs every month.”

The announcement has divided the public, with many pointing out that many households use less energy during the summer.

Nikhil said: “So energy bills are apparently going to drop by £122 in July and it has nothing to do with the fact that most people use a lot less energy during the summer.

“As winter approaches, there is no doubt that they will go back up again.”

Highlighting the minimum monthly reduction in the average monthly bill, Priya said:

“It’s misleading to say bills are coming down by £122 in July.

“The price cap has reduced the average bill by just £10.17 per month, which will be during the summer months, and will likely increase again before winter.”

Analysts at Cornwall Insight have forecast that recent rising wholesale prices may mean energy bills rise again in the lead-up to winter.

Those on prepayment meters will see a less immediate impact of a drop in prices in the summer.

The majority of households pay by direct debit and their payments are spread out over the year. They can expect more information from their supplier in the coming days about any price changes.

Companies will judge the level of direct debit on previous, and future predicted, usage. Customers can challenge any, or no, change by talking initially to their energy provider.

Falling energy bills have already helped push inflation down to its lowest level in almost three years.

Further declines would continue to feed through to the inflation rate, and may create more impetus for the Bank of England to reduce interest rates.

Ofgem is also gathering views on the way the price cap is calculated, including whether there should be a change to standing charges.

These are the fixed daily charges covering the costs of connecting to a supply, which have risen sharply in some areas.

How will Energy Prices Change?

  • Gas prices will be capped at 5.48p per kilowatt hour (kWh), and electricity at 22.36p per kWhA typical household uses 2,700 kWh of electricity a year, and 11,500 kWh of gas
  • Households on pre-payment meters will pay slightly less than those on direct debit, with a typical bill of £1,522
  • Those who pay their bills every three months by cash or cheque will pay more, with a typical bill of £1,668
  • Standing charges – a fixed daily charge covering the costs of connecting to a supply – are unchanged at 60p a day for electricity and 31p a day for gas, although they vary by region

Dhiren is a News & Content Editor who loves all things football. He also has a passion for gaming and watching films. His motto is to "Live life one day at a time".

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