Energy bills to fall from October as Ofgem price cap drops to £1,923 a year | Personal Finance | Finance

Britons will see their energy bills go down again going into the winter as the Ofgem price cap falls again.

From October, a typical household on paying for dual fuel by direct debit will pay £1,923 a year down from the current £,2074 a year.

Grant Shapps, secretary of state for Net Zero, said: “It’s encouraging families will see their energy bills continue to fall from October, down £580 on average since their peak – another milestone as we deliver on our promise to halve inflation.

“We acted swiftly when prices soared because of Putin’s abhorrent attack on Ukraine, spending billions and covering around half a typical household’s bill.

“And we are successfully driving Putin out of global energy markets so he can never again hold us to ransom, and we are boosting our energy independence to deliver cheaper, cleaner and more secure energy to British homes.”

Under the new price cap, average bills for prepayment households will fall from £2,077 a year to £1,949 a year.

With the drop, energy bills will fall to their lowest level since October 2021 as wholesale energy prices continue to fall.

Jonathan Brearley, CEO of Ofgem, warned Britons he “can’t offer any uncertainty” about the wider cost of living going into the winter months, when people’s bills tend to go up.

He said: “We’ve introduced new measures to support consumers including reducing costs for those on pre-payment meters, and introducing a PPM code of conduct that all suppliers need to meet before they restart installation of any mandatory PPMs.

“There are signs that the financial outlook for suppliers is stabilising and reasonable profits are returning.

“With the small additional allowance we’ve made to Earnings Before Interest and Tax (EBIT), this means there should be no excuses for suppliers not to be doing all they can to support their customers this winter, and to reinforce this we’ll be introducing a consumer code of conduct which we will look to have in place by winter.”

Kevin Pratt, energy expert at Forbes Advisor, warned despite another drop in prices, many Britons will still struggle to cover their bills.

He said: “While this feels like a significant landmark being passed in the right direction, let’s not forget that, as recently as March 2022, the price cap was less than £1,300.

“Households are still reeling from high energy bills, forking out huge amounts each month to power their homes, and just because prices are falling we should not be complacent about the burden that energy bills impose.

“While it is welcome news that energy prices are dropping, this is likely to kick-start a raft of offers from energy supplier to move their customers onto fixed rate tariffs. Whether or not that is a good idea, really is difficult to say.”

He called for more Government action to support those who most struggling to cover their costs. Mr Pratt said: “What is increasingly clear is that the government should give weighty and urgent consideration to the introduction of a social tariff, where energy is provided at a subsidised, below-market price to those whose energy bills take up a disproportionate amount of their income.

“The industry – including Ofgem – are open to the notion, but there are no official plans on the table. Even if they appeared today, it is unlikely they would produce anything concrete before winter bills start landing on doormats.”

Kevin Brown, savings specialist at Scottish Friendly, said households will be no better off in real terms despite the price fall.

He explained: “The energy price cap will drop marginally from October, but the truth of the matter is it remains well above levels seen before the cost of living crisis. The average household will be paying over £500 more than they were in October 2021.

“On top of that, households will not be receiving the £400 discount that they did last winter, which means a lot of people are likely to be no better off.

“It’s going to be another tough few months for a lot of families who unlike last year, are also grappling with higher mortgage rates and other increased borrowing costs.

“We would encourage families to do what they can now to prepare for the increase in their bills as the cold weather bites, however we know just how hard it is for a lot of households to find the spare cash to save at the moment.”

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