Ofgem has today announced its quarterly update to the energy price cap for the period 1 July - 30 September 2023.
From 1 July, the energy price cap will be set at an annual level of £2,074 for a dual fuel household paying by direct debit based on typical consumption, which reflects recent falls in wholesale energy prices.
For typical household consumption, the new price cap means an annual bill of £2,074, which is:
- £426 below the Government’s Energy Price Guarantee, which has capped the typical bill at £2,500 since October 2022
- £1,206 below the level of the previous cap without the EPG support from Government.
Today’s update means that, for the first time since the global gas crisis took hold more than 18 months ago, prices are falling for customers on default tariffs. The savings can now be passed on to customers more quickly, since Ofgem is now updating the price cap quarterly, rather than every six months.
Since the start of the crisis, this Government has delivered a £94 billion Cost of Living package worth £3,300 per household on average, while extending energy support by capping the Energy Price Guarantee at £2,500 until the end of June.
Dr Craig Lowrey, principal consultant at Cornwall Insight, said the new cap was good news for households:
"Under these predictions, an average consumer would see bills drop by around £450 compared to the existing levels of the energy price guarantee, with bills currently predicted to stay relatively stable over the next nine months."
Commenting on the price cap update, Mims said:
We stepped up to pay around half a typical energy bill- saving families in Mid Sussex £1,500 on average. Today I welcome the news that bills are set to fall further, with Ofgem lowering the price cap by £426. There is more work to do, but today's news marks real progress as we prioritise halving inflation.
Just last month we saw further cost of living support, with £900 being provided to those on means-tested benefits, such as Universal Credit or Pension Credit. As the Minister for Social Mobility, Youth and Progression, I know that this latest payment will be welcomed by millions of families across the country–as will further payments due over the next year.
At the Department for Work and Pensions, we have been working tirelessly to ensure that people receive enough support to get them through this challenging time. Thankfully the national picture is now improving, with favourable economic forecasts and more people getting into jobs than ever before.