There’s a lot of talk about the Energy Price Cap. But what exactly is it, and what difference will it make to your energy bills over the coming months?
Will the Energy Price Cap save you money this year?
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What is the Energy Price Cap?
The Energy Price Cap is set by the UK energy regulator, Ofgem, and it’s the maximum price that suppliers can charge you for energy. It sets a limit on:
- how much you pay per unit for each unit of gas and electricity that you use
- how much you pay for daily standing charges – the daily amount that suppliers charge for connecting and supplying your home, even if you don’t use any energy
It’s important to remember that while we talk about ‘typical bills’ and give figures as examples, the Energy Price Cap does not limit your overall bill, just the rates you’re being charged at. So, the more gas or electricity you use, the more you will still pay.
Energy bills: the good news
From 1 October 2023, the Energy Price Cap has been reduced by 7%. This means that the annual energy bill for a typical dual-fuel direct debit household in Great Britain will be around £1,923 (an average reduction of around £151 a year compared to the price cap set back in July).
Energy bills: the not-so-good news
Last winter’s Energy Bill Support Scheme ended in March 2023, which means that in real terms, bills will be bigger – especially as standing charges continue to remain high.
The next Ofgem review is due in January 2024, when the price cap is predicted to rise again. Ofgem is also redefining their definition of ‘annual typical use’ definition, which could make it seem like prices are dropping by more than they really are.
Three things you can do right now:
- Contact us to see if you qualify for an insulation grant.
- Check out our energy saving tips for practical ways to save energy (good for your bills and for the environment).
- Book a free no-obligation survey to have your home insulation checked by one of our professional surveyors.
