Energy Price Cap Decrease to Bring 17% Drop in Bills for Average Household

The cap will take effect on July 1st and will last until September.

The latest energy price cap will decrease the maximum amount that energy firms can charge for each unit by around 3p, which will result in an estimated 17% decrease in bills for the average household.

However, the price cap only applies to households on standard variable or default tariffs, not those on fixed rate tariffs or those who use oil to heat their homes.

The government's Energy Price Guarantee (EPG), which provided subsidies to reduce bills, will end on June 30th, which means the price cap will come back into effect.

The government's EPG was set at £2,500 a year for the average household, while the new price cap is £2,074 a year.

The UK's energy regulator Ofgem has warned that energy prices will remain high for the foreseeable future.

The CEO of Ofgem believes that "things are still going to be tough this winter" and fuel poverty charity National Energy Action agrees that the decrease in prices does not go far enough.

The decrease in prices is due to a decrease in wholesale energy prices, but analysts predict that fixed-rate deals will start returning to the market, which could help customers save money.

Ofgem advises customers to contact their supplier if they are struggling to pay their energy bills.