Ofgem is lowering its energy price cap from the current £2,074 per year to £1,923 for the average household in England, Wales and Scotland, effective from October 1, it has announced.
Although the cap has come down it still remains hundreds of pounds higher than it was in the winter of 2021, before the cost of living squeeze began to bite, meaning consumers will continue to face higher than average bills.
The price cap is the maximum amount paid by a customer for units of gas and electricity as well as daily standing charges, It is usually review four times a year in winter, spring, summer and autumn.
On Friday morning Ofgem said it was cutting the price that a supplier could charge for gas from 6.9p per kilowatt hour (kWh) today to 6.89p from October 1. The price of electricity will fall from 30.1p per kWh to 27.35p, Ofgem said.
This means that the average household bill will end up at around £1,923 per year, according to the regulator’s calculations. Because the cap decides the per unit charge, households that use more will pay more.
This is based on an estimate that the average household uses 2,900 kWh of electricity and 12,000 kWh of gas.
Last week experts at Cornwall Insight, an energy consultancy, expected gas to fall to 6.9p and electricity to just under 27p.
Ofgem chief executive Jonathan Brearley said: “It is welcome news that the price cap continues to fall, however, we know people are struggling with the wider cost of living challenges and I can’t offer any certainty that things will ease this winter.”