The energy price cap is the highest price that suppliers can charge you per unit of energy. Energy watchdog Ofgem updates this limit quarterly to reflect fluctuations in energy market costs and inflation.
Thanks to dropping wholesale energy costs, Ofgem has declared a 12% decrease in the cap, lowering it to £1,690 between April and June 2024. This is a saving of £238 from the current cap set from January to March 2024.
Remember, “average” costs are based on a medium-use household, typically a 2-3 bedroom home with 2 or 3 occupants. Your actual bill varies by your energy consumption, location, and payment method.
More details on average energy bills tailored to different home types can be found on our website.
Previously, in November, Ofgem raised the cap by 5% for the January to March 2024 quarter due to spiking wholesale gas prices, making average bills climb by about £94 per year. The price cap returned to mid-2023 levels then.
The newly announced reduction as of February 23, 2024, brings average energy bills down to the lowest since mid-2022.
Is the Energy Bill Discount Still Available?
The government’s Energy Bills Support Scheme, which offered a £400 discount from late 2022 to early 2023, has ended. While budgeting, consider that these discounts won’t be available this winter.
There are different support schemes in England, Scotland, and Wales for those eligible. Residents in Northern Ireland can find respective information on the government website.
The Warm Home Discount Scheme, one of these aids, previously offered benefits recipients and those getting the Guarantee Credit element of Pension Credit up to £150 off electricity or gas bills in winter.
Am I Affected by the Energy Price Cap?
Individuals on fixed energy tariffs are not influenced by the price cap.
The cap is relevant for customers on default, standard variable tariffs, regardless of their payment method, including direct debit, standard credit, prepayment meters, and for Economy 7 meter users.
Changes from October 1, 2023, altered how discounts apply to prepayment meters. Instead of rate discounts, a standing charge discount is now applied.
For direct debit customers, bills are often an estimate of usage, so check with your provider if you believe you’re overpaying or have substantial credit.
Energy Price Cap by Payment Type: April to June 2024
The table below shows the price caps for different payment types, reflecting a significant drop in the cap from the previous quarter.
For more details on how the Energy Price Cap is determined, read our additional information.
How Do the Price Cap Changes Affect My Bills?
Analyze the average energy rates below and compare them to your own expenses for an estimate of your household’s consumption.
Average Energy Rates Per Unit Used:
We detail average gas and electricity rates for different quarters, particularly for direct debit payers, which may vary by region.
Ofgem categorizes households based on size and occupancy—typical gas and electricity usage rates apply differently to low, medium, and high use homes.
Tables display expected annual usage for varying household sizes, with the source being Ofgem.
Current rates and standing charges in your region can be found on Ofgem’s website.
Energy usage depends on a home’s efficiency and frequency of appliance use, with energy measured in kilowatt-hours (kWh).
Will My Bill’s Standing Charge Change?
The standing charge, a fixed cost for your energy connection, will vary based on supplier, tariff, and location. It covers network maintenance, meter readings, and environmental programs.
Current charges are around 53p per day for electricity and 30p for gas from January to March 2024 but will increase slightly from April to June 2024.
Ofgem began a review of standing charges in 2023 and will recommend changes later this year.
Predictions for Energy Cost Changes
The Energy Price Cap changes every three months, with updates in January, April, July, and October.
Consultancy Cornwall Insight predicts a decline in energy costs throughout spring and summer 2024, followed by a rise at year’s end.
