Achi news desk-
This is around £500 less than the cap in July last year, when it was £2,074.
Citizens Advice chief executive Dame Clare Moriarty said: “Today’s news will provide some comfort to households still facing the pressures of the cost of living.
READ MORE: Scottish Power ‘sorry’ for erroneously overcharging energy bills
“The reduction in the cap on energy prices reduces bills slightly, but our data tells us that millions have fallen into the red or are unable to pay their essential costs every month.
“People cannot rely on lower energy prices alone to escape the financial problems they have been experiencing.
“That’s why we need better targeted energy bill support for those struggling to keep the lights on or cook a hot meal.”
The quarterly energy Price Cap will change from 1 July 24
The new #PriceCap is £1,568
The level is based on the normal usage of an average household on their supplier’s standard default tariff
It is a cap on the unit price of energy, not a cap on total bills
More ⬇️ https://t.co/zfgZcnGU5T pic.twitter.com/NXoEQJJgRW
— Ofgem (@ofgem) May 24, 2024
The latest drop offers further relief to households given the previous quarter-on-quarter drop seen in April, but analysts have said they expect Ofgem to increase the price cap in October, before dropping it again in January 2025.
Ofgem changes the cap on prices every three months based on several factors, the most important of which is the price of energy on wholesale markets.
READ MORE: Energy price cap to fall to lowest in more than two years
The price cap does not limit total household bills, people still pay for each unit of gas and electricity they use – the figures provided are only for an average household.
On Wednesday, Ofgem chief executive Jonathan Brearley told the Energy Security and Net Zero Committee that prices “are still significantly higher than they were before, and when we look further our best estimate is that prices will remain high and variable over time” .
Mike Thornton, chief executive of the Energy Saving Trust, said: “Today’s confirmation that energy prices are coming down for the next quarter is very welcome.
“However, no one should take this lower price cap as a sign of stability.
“Forecasts show that energy prices will rise again this autumn and will generally remain high for the next decade.
“After the election the new UK government must prioritize policies that support people to use less energy and install cost-effective energy efficiency improvements in their homes.
“This will be essential to lower energy bills, reduce carbon emissions and guarantee our energy security in the long term.”
Ofgem is currently reviewing the price cap and looking at how it is calculated.
This includes summing up changes to fixed charges, which are fixed daily charges which include the cost of supply connections.
