Energy Bill to Drop by 7% for UK Households This Summer
In a positive development for British households, the energy bill is set to decrease by 7% this summer. The announcement comes after Ofgem, the regulator, decided to cut the price cap. Currently, the cap for a typical ‘dual fuel’ home stands at £1,690. However, starting from July, it will drop to £1,568. While individual bills may vary, this reduction is expected to have a significant impact nationwide.
This decrease is particularly noteworthy when compared to last year’s figures. In July 2020, the price cap reached a staggering £2,074. This means that over the course of 12 months, the cap has been reduced by more than £500. Despite this positive news, Dame Clare Moriarty, the chief executive of Citizens Advice, warns that the UK’s most vulnerable households have already been severely affected. She emphasizes that while lower energy prices can provide some relief, millions of people are still struggling to cover their essential costs.
Dame Clare Moriarty calls for targeted support to alleviate the financial burden faced by many Brits. For those who are forced to think twice before cooking a hot meal or turning on the TV, better measures are necessary. Ofgem’s decision to lower the price cap is a response to the decrease in wholesale energy prices. However, Jonathan Brearley, the regulator’s boss, cautions that prices remain significantly higher than before due to factors such as the Ukraine war and the ongoing Covid pandemic. He predicts that prices will continue to be high and volatile in the foreseeable future.
Experts believe that the price cap may be increased again in October, followed by a potential decrease in January next year. Martin Lewis, the renowned Money Saving Expert, highlights analysis from Cornwall Insight, which suggests that this recent reduction may be the last for a while. In fact, predictions indicate that the October increase could be as high as 12%. It is important to note that while the cut in the price cap is significant, it does not affect standing charges, which are the fees charged by suppliers to customers who do not use any electricity or gas.
Overall, the reduction in the energy bill is welcome news for British households. However, it is crucial to address the financial struggles faced by the most vulnerable individuals. With the possibility of future price increases, targeted support and measures are necessary to ensure that everyone can afford their essential energy needs.
