The Government’s Energy Price Guarantee has now come to an end (Picture: Getty Images)
Households are set to see a significant drop in their energy bills from July but they will be ‘80% higher than they were two years ago’.
The energy price cap, which limits how much suppliers can charge for each unit of energy they use, will be lowered by around £450.
Ofgem has said a typical household will now start paying £2,074 on its gas and electricity bill.
This is because the Government’s Energy Price Guarantee – which limited the typical bill to £2,500 since October – has come to an end.
The guarantee was implemented after wholesale prices were pushed up following Russia’s invasion of Ukraine and the pandemic.
Costs soared from £1,162 a year for a typical household in August 2021 to £4,279 at its peak.
Now wholesale prices are falling again, forecasters expect the typical annual bill will drop to £2,050.
It is then expected to fall again to £1,976 in October.
Ofgem has said a typical household will now start paying £2,074 on its gas and electricity bill (Picture: Getty Images)
But households will still be charged for the amount of fuel they use, as the cap limits the amount providers can charge them per unit of gas or electricity – not the maximum a household will pay.
Kirsty Kenney, co-founder of household energy efficiency specialists Kuppa, told Metro.co.uk: ‘It’s important for consumers to remember that energy bills won’t be “capped” at £2,074.
‘The actual cap is on the amount you can pay per unit of energy that you consume at home and the amount you pay each day to access that energy.
‘As a guide, you can expect to pay around 15% less over the year, if you use the same amount of energy.
‘The more energy you use, the more it will cost you. The headline figure misses the fact that, for most people, their bills will still be 80% higher than they were two years ago.’
Consumers need to make short-term and long-term changes if they want to bring down the cost of their bills (Picture: Getty Images)
Only those in receipt of means-tested benefits, pensioners and disabled people are currently set to receive further help with their energy bills, amounting to £900, £300 and £150 respectively.
The standing charge, roughly £300 paid each year by households to access gas and electricity, is unlikely to fall.
The government has also promised prepayment energy charges will be brought in line with those for direct debit customers.
But those who pay via cash, cheque or bank transfer will pay significantly more – making them more likely to fall into debt.
If consumers wish to have any chance of bringing their bill costs down to pre-crisis levels, they need to make changes to make their household more energy efficient.
Those in receipt of means-tested benefits, pensioners and disabled people are currently set to receive further help (Picture: Getty Images/iStockphoto)
Ms Kenney said: ‘Increasing your home’s energy efficiency helps protect you from these high costs. Fix the roof while the sun shines.
‘You can do this by making small changed in the short term and plan for bigger changes in the longer terms.
‘This includes draught-proofing, reducing boiler flow temperature, installing secondary glazing and investing in heating controls.’
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