John Campbell
BBC News NI economics and business editor

The price cap announced today applies to England, Scotland and Wales - Northern Ireland has a separate energy market with a different system of regulation.

Throughout the energy crisis, consumer prices in Northern Ireland have tended to be lower than in the rest of the UK.

But that is not guaranteed to be the case in future.

We'll find out next week what the withdrawal of the government price guarantee and falling wholesale prices will mean for us.

Image source, Getty Images

Friends of the Earth believe things will only get tougher for the hardest-hit communities as the price of food continues to soar, and average energy prices are unlikely to fall back to pre-pandemic levels until at least 2030.

"People shouldn’t have to wait ten years before they can afford to pay for life’s basics," says Sana Yusuf, warm homes campaigner

"The government must not waste another summer that could be spent rolling out a street-by-street insulation programme.

"Not only will this bring down bills quickly and help to protect people from the cold, it’s vital to cut the emissions our homes produce if we’re to meet our climate goals.”

Kevin Peachey
Cost of living correspondent

People who pay by cash, cheque, or bank transfer will typically pay £137 a year more than those who pay by direct debit.

Ofgem says that is the result of higher operating costs for suppliers and the higher likelihood of bad debts.

Speaking in the last few minutes, officials from the regulator have said they will publish new proposals in the autumn.

That could bring those bills closer together, irrespective of how you pay.

Hannah Miller
BBC Breakfast business presenter

I'm back in Ipswich nine months after I last visited to speak to people about how the cost of living crisis is impacting them now.

Maureen Reynell, who founded FIND - a food bank in Ipswich tells me: "It’s been very obvious that people are really struggling."

She says although the news that the typical energy bill is set to fall from July, many people are already in dire financial trouble.

"I think it’s going to be a long long time indeed before these changes have an effect," she says.

"A lot of people are in debt...they’re in such a mess, and obviously mental health problems have escalated."

But she does have hope that the community will continue to look after one another.

"We will get through this because while there are people in need there are people there to help," she says.

Image source, Reuters

Homes that use pre-payment energy meters - typically vulnerable customers or those on low income - have in the past been charged more than those who pay through direct debit.

Energy suppliers claim they're charged more because apparently it costs more to manage the meters.

The government's Energy Price Guarantee scheme, which tackles that discrepancy by compensating customers, will continue to run for pre-payment homes, external from 1 July until 31 March next year.

That means the typical annual energy bill for those on a pre-payment meter will be £2,077 compared to the £2,074 payment from homes using direct debit.

Regulator Ofgem will report on how to permanently end the "prepayment penalty" when that government support ends in April 2024, the Treasury said.

Charity Citizens Advice estimates that 600,000 people were forced onto a prepayment meter because they couldn't afford their energy bills in 2022.

Liberal Democrat leader Ed Davey has given his verdict on the new price cap too.

He says: "This will offer cold comfort to millions of families struggling with soaring food prices and housing costs.

"The Conservative government could have chosen to cut energy bills months ago funded through a proper windfall tax.

"Instead Rishi Sunak put bills up while families suffer. It shows he doesn't get it or just doesn't care."

Gas and electricity bills remain "eye-wateringly high", according to shadow climate change secretary Ed Miliband said.

He said energy costs will still be nearly double what they were 18 months ago: "And families and businesses across the country will continue to struggle to make ends meet."

Miliband added: "This is the result of 13 years of Tory energy policy failure, blocking onshore wind, closing our gas storage, and stalling on energy efficiency, which has left our country insecure and vulnerable to high gas prices."

Emma Owen
Live reporter

It's a complex business, energy, and how, when and who you pay for your gas and electricity can make a big difference.

Luckily our cost of living correspondent Kevin Peachey is priming himself for any questions you may have.

You can get in touch in the following ways:

• Email: yourquestions@bbc.co.uk
• WhatsApp: +44 7756 165803
• Tweet: @BBC_HaveYourSay, external
• Please read our terms & conditions and privacy policy

In some cases a selection of your comments and questions will be published, displaying your name and location as you provide it unless you state otherwise. Your contact details will never be published.

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Prime Minister Rishi Sunak has shared his thoughts on today's move.

"Welcome news that the energy price cap is coming down, reducing energy bills from July by nearly £430 on average per year," he said.

"It marks a major milestone in our work to halve inflation."

There are steps you can take if you have having difficulties paying your gas and electricity bill.

Firstly, if you pay by direct debit, check the amount. Your monthly payment is based on your estimated usage through the year not what you actually use so keep a close eye and update your supplier with your readings.

You could also ask your energy firm for an "able to pay plan". By paying what you can - even if it's less than the amount due - your arrears will grow more slowly and your supplier is likely to be less worried about your debt.

Read more here

Campaigners have warned that bills will remain unaffordable for millions of households, saying most will be paying the same energy bills this winter as last.

"After months of inflation and the wider cost of living crisis, people are even less able to afford these high energy bills," said Simon Francis, coordinator of the End Fuel Poverty Coalition.

"The UK Government needs to use the summer to fix Britain's broken energy system."

"This means ramping up energy efficiency programmes, helping the public with energy debt and reforming energy pricing arrangements so people don't suffer again this winter."

Image source, PA Media

Citizens Advice chief executive Dame Clare Moriarty said while the the price cap fall offered "some desperately needed respite... for many, life is getting worse, not better".

"Year on year we're breaking records for the number of people struggling with energy debt," said Dame Moriarty.

"It's clear more government support will be needed in the future for struggling households."

Michael Houghton credits the Emmaus charity, in Ipswich, for helping him to get through this winter.

Along with Citizens Advice they helped him to apply for grants that have enabled him to keep paying his soaring energy bill.

Mr Houghton says his gas bill rose to almost £30 per week over the winter, forcing him to cut down on food shopping and entertainment.

He’s thankful for a charity hub that gave him a warm space to chat to people and play board games for free - and for the warmer weather that has recently brought his gas payments down.

But Mr Houghton says that prices remaining high is a concern in the long term - without more support he thinks he won’t be able to afford to pay his energy bills if they remain at a similar price this coming winter.

Image source, PA Media

Energy Security Secretary Grant Shapps gave his reaction to the drop in typical bills earlier.

"We've spent billions to protect families when prices rose over the winter, covering nearly half a typical household's energy bill.

"We're now seeing costs fall even further, with wholesale energy prices down by over two-thirds since their peak as we've neutralised Putin's blackmail."

He remains "relentlessly focused" on reducing the UK's reliance on foreign fossil fuels and delivering "cheaper, cleaner and more secure energy", the energy secretary adds.

According to consultancy firm Cornwall Insight, they'll pretty much stay the same later in the year and in early 2024.

It reckons that the price cap will tick a bit lower to £1,959 between October and December. That is then expected to rise to around £2,026 in the first three months of next year.

"Affordable energy bills can no longer be taken for granted", Cornwall Insight's principal consultant Dr Craig Lowrey says.

"We must confront the reality that the cap, while offering some limited protection, doesn't do enough to shield many vulnerable consumers from the burden of unaffordable energy costs."

Kevin Peachey
Cost of living correspondent

There is already talk today of switching, new deals and competition returning to the market.

But for some people there is a relatively simple switch to consider in order to save money.

Those who pay for what they use, usually every three months, by cash, cheque or bank transfer will pay more.

The July price cap for these customers is £2,211 a year if they use a typical amount of gas and electricity, compared with £2,074 for those who pay via direct debit.

Ofgem says that reflects their higher likelihood of missing payments. Charities say it is unfair.

Anyone who can switch to paying via monthly direct debit – even though that gives some control back to their supplier on bills – may find it saves them money.

Ofgem have tweeted the average direct debit unit rates, external for energy from 1 July, including the standing charge which, as we've just pointed out, is unchanged. They are:

ELECTRICITY unit rate:

• 30p per kWh
• Standing charge: 53p per day

GAS unit rate:

• 8p per kWh
• Standing charge: 29p per day

These are caps on unit rates (not a cap on total bills) and vary by region, Ofgem has cautioned.

Image source, pa

Every household has to pay a standing charge of around £300 a year to receive gas and electricity.

"That means that even before you’ve used a unit of electricity or gas you’ll have to pay £5.74 a week just to be connected," says Laura Suter, head of personal finance at AJ Bell, the city brokerage firm.

The standing charge is 29p per day for gas and 53p each day for electricity.

That's more than the new price cap where suppliers are limited to charging no more than 8p for each kilowatt hour of gas and 30p per kilowatt hour of electricity.

Energy industry analysts say it's unlikely customers will see further substantial falls in bills this year and beyond.

Speaking on Radio 4's Today programme, Kate Mulvany from Cornwall Insight says lots of factors are in play including geopolitics and the weather.

"The energy markets are international. So if there's a very cold winter ahead of us, across Europe, that's going to drive up prices in lots of places, including the United Kingdom.

"So for the rest of this year, we think that it's unlikely that there's going to be any further substantial falls as prices could rise in the winter period."

Mulvany went on to say higher and more volatile prices could be seen until the end of the decade saying investment is needed in "sustainable, renewable local energy sources" to bring bills down in the long term.

Around 29 million households will be affected by the change in the price cap, including about four million on prepayment meters.

So, who will be paying what from July?

• A dual-fuel household paying by direct debt will see an typical annual bill of £2,074
• Homes using a prepayment meter will pay £2,077 a year
• People paying by cash, cheque or bank transfer - usually every three months - face an annual charge of £2,211

Emma Owen
Live reporter

Confused? You wouldn't be the first. Our cost of living correspondent Kevin Peachey is priming himself for any questions you may have.

You can get in touch in the following ways:

• Email: yourquestions@bbc.co.uk
• WhatsApp: +44 7756 165803
• Tweet: @BBC_HaveYourSay, external
• Please read our terms & conditions and privacy policy

In some cases a selection of your comments and questions will be published, displaying your name and location as you provide it unless you state otherwise. Your contact details will never be published.

Image source, .