Energy regulator Ofgem has announced that from July 1, the cost of energy for the average dual-fuel UK household paying by Direct Debit will drop from £1,849 to £1,720 per year.
The price cap is reviewed every three months by the regulator based on the wholesale cost of electricity and gas. While a total average annual bill is typically cited, it is the standing charges and unit rates for gas and electricity that are capped, so using more energy leads to higher bills. It also only applies to households on the default tariff, and other deals are available. For example, those who took up a fixed deal in July last year, when the price cap was £152 lower than for the same point this year, have been insulated from subsequent price rises.
Ofgem’s director general of markets, Tim Jarvis, said that while the reduction is good, the regulator accepted that fuel prices were still uncomfortably high for many. He said he wanted to remind people that:
“…there are better deals out there, so it’s important to shop around, and talk to your existing supplier about the best deal they can offer you. And changing your payment method to direct debit or smart pay as you go can save you up to £136.”
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