Nathan Williams
Live reporter

We'll soon be closing our live coverage that was focussed on the cost of energy. But before we go, here's a reminder of what happened today:

• New price cap: Energy bills will fall to £2,074 a year for the typical households in England, Scotland and Wales
• Who pays what?: About 29 million households will be affected by the change. To see what you could be paying from July, take a look at our earlier post here
• Market stabilising: Ofgem boss Jonathan Brearley said the announcement is a sign the market is stabilising, but it's unlikely prices will return to what they were before the energy crisis
• Major milestone: PM Rishi Sunak said the fall "marks a major milestone in our work to halve inflation"
• Labour reaction: Shadow Climate Change Secretary Ed Miliband said energy costs will still be nearly double what they were 18 months ago
• Support: Citizens Advice say that while the price cap offers some respite, more government support "will be needed in the future for struggling households"

Today's coverage was written by Victoria Lindrea, Anna Boyd, Dearbail Jordan, Jen Meierhans, Kevin Peachy, Adam Durbin and Aoife Walsh.

It was edited by Emma Owen and myself.

If you want to read more, you can find our news story here.

Plus there's more on the energy price cap here.

And you can find out more about cost-of-living support here.

Thanks for your questionspublished at 13:50 British Summer Time 25 May 2023

13:50 BST 25 May 2023

That's all for our Q&A session on energy bills for now, thanks for all your questions.

Here's a quick summary of the key takeaways from our cost of living correspondent Kevin Peachey:

• Energy prices are likely to still be high this winter, as things stand, because there are no current plans for government assistance to begin again
• People who use less energy than the new price cap will also see a drop in their bills, as energy is charged per unit of gas or electricity used and the £2,074 cap is for typical usage, not an absolute limit (so you can also still spend more)
• You can challenge your supplier directly (or with the energy ombudsman, external if this fails) if you think they are charging you too much via direct debit based on your estimated energy usage
• It's recommend to take your time when shopping around for new gas and electricity deals if you are going to fix the price, given there is significant volatility in the market price of energy
• People on pre-payment meters will still pay a few pounds more for their energy cost, but a larger cost saving is made by people paying via direct debit over cash, cheque or bank transfer

Why does the regulator talk about 'typical household' bills?published at 13:43 British Summer Time 25 May 2023

13:43 BST 25 May 2023

Kevin Peachey
Cost of living correspondent

Rod Dennis asks: "Can I ask why Ofgem publishes difficult-to-compare "typical household" figures rather than pence per kWh numbers, so households can actually work out how much they’ll be spending? I don’t know if I’m in a "typical household’" or not."

Both are published, but it is never that easy to compare. You do need to take a close look at your statements from your supplier.

The Ofgem calculations for a typical household are based on a direct debit customer using 12,000 kWh (kilowatt hours) of gas and 2,900 kWh of electricity a year.

A kilowatt hour is a unit of energy used to calculate your bill.

You will probably use more or less than that - but it does give you an idea.

Under the new cap, the electricity unit rate is 30p per kWh, with a standing charge of 53p a day.

The gas unit rate is 8p per kWh and the standing charge is 29p a day.

Kevin Peachey
Cost of living correspondent

Commentators say that many households embraced the message of cutting back on energy use when bills were high last winter, sometimes by necessity and sometimes out of choice.

They said, if that continued, it would help reduce domestic bills, especially if people used the summer to make changes.

When Tim Phillips moved into his home near Cambridge, he said it was "a nice surprise" that the newly-built property had solar panels on the roof.

It started a journey which now sees him use cheaper energy at night to charge a battery in his garage, as well as his electric car.

That energy bank is then used to power his appliances during the day, when his variable tariff would have charged more.

An "energy brain" - a small computer in the downstairs cupboard - also helps to keep the costs down, by pulling any excess energy from the solar panels and using it to heat his water.

Tim keeps a close eye on his in-home display, which tells him when something is using up a lot of energy. That may be the oven, for good reason, but it may also be that an appliance has been left on unnecessarily.

Until the end of March, businesses had their costs limited under the government's Energy Bill Relief Scheme – which fixed wholesale gas and electricity prices for firms for six months from last October.

Under a new scheme running until March 2024, firms get a discount on wholesale prices, rather than costs being capped.

Heavy energy-using sectors, like glass, ceramics and steelmakers, will get a larger discount than others.

Read more here.

We asked Cornwall Insight, an energy market intelligence and analysis consultancy, why electricity prices are higher than gas.

They tell us gas and electricity are both priced in kWh of usable energy for consumers.

"The cost per unit of electricity is higher due to various factors, including production and system losses, delivery charges, and policy expenses," a spokeswoman says.

It takes approximately 2 kWh of gas to produce 1 kWh of usable electricity for consumers, alongside this energy is lost during transmission through wires, she says.

Additionally, the costs of subsidies for renewable energy are currently levied on consumer power bills only, and not gas, she adds.

Nicky Hudson
Cost of Living Producer

Nicole Williams, a mum of two in Barnsley, says energy bills are always on her mind, "even boiling a kettle and doing my washing", she’s conscious of anything which uses energy in her home.

She says she and her partner are topping up their prepay gas and electricity meters "a lot more regularly than we used to".

She says it feels like: "I already need to top up again and I’ve just done it. I do notice I’ve done it a lot more."

When she hands over the money to top up she thinks "I could have done something else with that, taken the kids to something nicer, day out, just simple stuff."

Why are people on pre-paid meters still being charged more?published at 13:18 British Summer Time 25 May 2023

13:18 BST 25 May 2023

Kevin Peachey
Cost of living correspondent

Paul from Newcastle asks: "I thought that from July people on pre-payment meters weren't supposed to be charged differently to those paying by direct debit. And yet there is a difference, albeit a small one?"

There is a tiny difference. For typical households, those on prepayment meters will pay £3 more.

That’s for technical reasons, as there are still two separate caps, and the differential is much smaller than it was under previous caps.

More significant is the fact that those who pay via cash, cheque or bank transfer, usually every three months, will pay about £130 more than an identical customer paying via direct debit.

Why? Ofgem says there are higher operating costs and more chance of these customers not paying. However, it is taking views on whether this gap should be narrowed.

Millions of people are receiving additional help with rising bills through cost-of-living payments. This includes:

• £900 to households on means-tested benefits - paid in three instalments in spring 2023, autumn 2023 and spring 2024
• £300 for pensioner households next winter
• £150 to people on certain disability benefits, being paid in the coming weeks

Vulnerable families can also claim help - from October 2023 - with the Warm Home Discount, external scheme.

Importantly, the £400 discount which all households in England, Wales and Scotland received during the past winter has finished.

Read more here

Why does my energy company want to increase my direct debit?published at 12:57 British Summer Time 25 May 2023

12:57 BST 25 May 2023

Kevin Peachey
Cost of living correspondent

Graham, 53, in Surrey, asks: "I'm on a fixed direct debit with my energy company, meaning I'm in credit in the summer and debit in the winter. But the company seem to want me to increase the direct debit so I'm not in debit during the winter. This gives an average yearly credit of 50% of my bill. Why should I give them this money?

This is a common complaint, because suppliers are estimating how much energy you will use, based on the type of home you are in and past behaviour.

If your credit is high, or you think the direct debit demand is over the top, you can challenge your supplier. Call them first; after that, you could go to an ombudsman.

Ultimately, you will only ever pay for the energy you use. But, it is worth keeping a close eye on it, especially if you’ve been working hard to cut your energy usage.

Here are some energy saving ideas from environmental scientist Angela Terry, who set up One Home, a social enterprise that shares green, money-saving tips.

• Getting a water efficient shower head free of charge from your water company and using showers rather than baths
• Considering loft insulation, which she says costs around £460 for a typical semi-detached home and could save £355 a year on gas bills
• Hanging out washing instead of using a tumble dryer, and walk instead of drive when possible
• Use windy days to feel where draughts are in the house. Wetting the back of your hand helps to locate them, then use insulation or draught-proofing tape
• When available, press the smaller button to use less water to flush the toilet

What happens when my fixed deal comes to an end?published at 12:37 British Summer Time 25 May 2023

12:37 BST 25 May 2023

Kevin Peachey
Cost of living correspondent

Becky from Epsom asks: My fixed dual fuel tariff comes to an end next month. I’m confused about the best option for me - I don't want to lock myself into a fixed price contract and then see prices drop even further, but I am also wary of your reporting of likely volatility in prices in the next few years.

Welcome, Becky, to the difficult decision many people will be considering.

At the end of your fixed term, your tariff will automatically switch to a default one, governed by the price cap.

You will be able to shop around for a new, fixed deal - but, of course, I can't advise you on that.

Safe to say, consumer groups suggest taking your time, being aware that fixing won’t be best for everyone, and pay close attention to exit fees.

Is anything being done to limit standing charges?published at 12:18 British Summer Time 25 May 2023

12:18 BST 25 May 2023

Kevin Peachey
Cost of living correspondent

Gareth asks: What measures are in place to limit the increase in price of gas and electricity daily standing charge?

For some people, mainly those who don’t use much gas and electricity, standing charges are a real bugbear.

They are the charge for having a supply to your home, and there really isn’t much you can do about it.

However, Ofgem officials have just been saying how they are consulting on moving some of the fees from the standing charge onto the unit charge of energy. Watch this space on that one.

Will energy prices rise again in winter?published at 12:08 British Summer Time 25 May 2023

12:08 BST 25 May 2023

Kevin Peachey
Cost of living correspondent

Ivor asks: Isn't it simply that the energy companies will raise the prices again when the cold weather comes?

Some 29 million households in England, Wales and Scotland are on variable or default tariffs at the moment.

Those tariffs are controlled by Ofgem’s price cap. That means suppliers can’t simply raise prices as much as they want. Their charges must reflect wholesale costs, which they pay, among other things.

The cap limits the price for each unit of energy.

While forecasts don’t offer certainty, they do suggest that bills will be slightly higher in the coming winter. And remember, at the moment the government has no plans to repeat the £400 discount we all received last winter.

That means, as things stand, next winter is going to feel pretty much the same as the last in terms of bills - and, if it is colder, you may end up using, and therefore paying, more.

What if your bill is less than the new price cap?published at 12:01 British Summer Time 25 May 2023

12:01 BST 25 May 2023

Kevin Peachey
Cost of living correspondent

Dave Forrest asks: Does the new cap mean that anyone whose current annual bill for gas and electricity is under £2,074 will not see any drop in cost?

No, it doesn’t, Dave. The reason for that, which can be quite difficult to get your head around (believe me!) is that the cap is on the price of each unit of gas and electricity.

From July, the electricity unit rate will be 30p per kWh, with a standing charge of 53p a day.

The gas unit rate will be 8p per kWh and the standing charge is 29p a day. The £2,074 figure illustrates what that would mean for the annual bill of a household using a typical amount of gas and electricity.

So, irrespective of the size of your bill, the price is set to go down.

Emma Owen
Live reporter

We promised you we'd answer your questions on the energy price cap, and what it means for your finances.

Our cost of living correspondent Kevin Peachey is making a start now - stay with us to read his pearls of wisdom.

We're having a change of staff here at the same time - I'm now handing over to my colleague Nathan Williams, who will guide you through the rest of our coverage.

Your questions answered is coming up any minute now...

Image source, .

Hannah Miller
BBC Breakfast business presenter

Speak to people in Ipswich and they’ll tell you this morning's news is welcome, but many think it will be a long time before they feel any real benefit.

Pamela and her husband both work and have had to use a food bank to make ends meet in recent months. She is pleased energy bills might start to fall, but it will take a much more significant drop, or more government support, to take the strain off their family life, she says.

When I visited last August, the fear was palpable - energy bills were set to rise and the government hadn't yet outlined its plans to help. When ministers did expand the support available, it did make a difference. People are aware of that, they're also aware of the huge profits that have been made by energy producers.

Now the mood has shifted to one of frustration and resignation. The sunny days are a welcome distraction, with many trying to find ways to enjoy the next few months. But that will also be done on a strict budget - the struggle has set in.

Colletta Smith
Cost of living correspondent

When you take into account that we’ve all lost that £400 government help we received over the winter months, July’s new price cap is an annual saving of £26.

Given that this announcement only covers one quarter, that’s a best-case saving of £6.50.

But given that most of us use a lot less gas and electricity over the summer months, we’ll actually be seeing an even smaller difference in our bills – not much to write home about.

This isn’t the major pressure relief that so many households are in need of but perhaps a sign that things aren’t getting any worse.

If you're just joining us, here's what we've learnt so far today about our energy costs:

• Annual bills in England, Scotland, and Wales will fall to £2,074 a year for the typical household from July, under the new price cap announced by the regulator Ofgem
• That's a drop of £426 from the price guarantee, which set the typical bill at £2,500

• Looking forward, money saving expert Martin Lewis says overall bills will be the same this winter as last, because extra government support is gone
• "People will still be paying double what they used to pay before the energy crisis hit," he warns
• BBC Economics Editor Faisal Islam says it's an important moment for the UK economy as the bulk of government support ceases
• Being able to afford gas and electric is still a concern for many - one bill payer in Ipswich says energy costs are just a "slice" of the increased cost of living

If you have any questions for our cost of living correspondent Kevin Peachey - get in touch here.