Energy price cap to fall by 7% in July: how much money will you save?
Energy bills will drop to £1,568 per year on 1 July 2024 if you're on a price-capped tariff, if was confirmed this morning.
That's a saving of £122 over a year for a home using a typical amount of energy.
The price cap fell by 12.3% at the start of April, which means, combined with the 7% fall today, annual energy bills for a typical household will be around £506 less than they were last July.
However, they are still hundreds of pounds higher than before the energy crisis.
The price cap isn't a limit on your total bill – the amount of energy you use determines how much you pay. If you're on a fixed deal, then it doesn't apply to you.
Find out more: what is the energy price cap?
How much will I pay for energy in July 2024?
The headline figure of £1,568 applies to a household that uses a 'medium' amount of gas and electricity.
The energy regulator, Ofgem, says this is 11,500kWh gas and 2,700kWh electricity per year. So if you use more or less than this, the total amount you pay will be different. The energy price cap does not apply to Northern Ireland, where the energy sector is regulated differently.
For a more accurate estimate of what you'll pay, use the average unit rates and standing charges. From 1 July to 30 September 2024 for direct debit customers these will be:
- Electricity unit rate: 22.36p per kWh
- Electricity standing charge: 60.12p per day
- Gas unit rate: 5.48p per kWh
- Gas standing charge: 31.41p per day
Compared with current rates, the unit rates are slightly lower. However, the standing charges are almost unchanged.
Prices also vary depending on where you live and how you pay. For example, if you receive a bill from your energy company, it will cost you £100 more per year. If you prepay, your bill will be more than £40 less per year.
Your energy supplier should contact you with new prices before it starts charging them.
Use our energy bill calculator to estimate your spend for the next year, if you're paying price-capped rates.
Why is the energy price cap dropping?
Wholesale electricity prices fell to a 30-month low in February, before rising slightly and remaining stable from mid-April, according to the energy consultancy Cornwall Insight.
Ofgem takes into account recent changes in wholesale prices when it sets the energy cap.
The price cap is expected to rise in October and fall again in January 2025, according to Cornwall Insight.
Should I choose a fixed deal for energy?
When we last checked, there was limited opportunity to save money, compared with the current price cap rates, by switching to a fixed deal.
Four fixed deals saved the average household more than £100 over a year, but with the price cap set to drop, this saving would be reduced.
If you're keen to switch, look for a tariff that will cost you less than the new price-capped rates you'd be paying from July.
Check for exit fees in case cheaper deals come along, or the price cap drops further in future.
Find out how to get the best energy deal. If you've already fixed your prices above the April price cap, here's how to get out of your fixed energy tariff.
