Summary

  • We're answering your questions after Ofgem revealed a new energy price cap which will lower bills later this year

  • Energy bills will fall slightly in the three months from October to £1,923 a year for the typical household, the regulator Ofgem said

  • It's a drop of £151 on the current annual energy bill for a typical household which is £2,074

  • The price cap influences what 29 million households in England, Wales and Scotland pay for their energy - it's the price per unit, not the total bill

  • Under the new cap, the average household energy bill will still be hundreds of pounds higher than in winter 2021, when it was £1,277

  • PM Rishi Sunak says the dip is "good news" for families, but Labour says the figures demonstrate "the scandalous Tory cost of living crisis"

Live Reporting

Edited by Marita Moloney

  1. Average energy bills fall below £2,000 for first time since April 2022

    Today's announcement from Ofgem means the average household's energy bills will dip below £2,000 a year for the first time since April 2022.

    The current cap of £2,074 a year will drop to £1,923 for the average household in England, Wales and Scotland from 1 October.

    But it's important to remember the cap applies to the unit price of energy, not the total bill, so if you use more, you'll pay more.

  2. Energy bills to fall from October
    Breaking

    Energy bills will fall to £1,923 a year for the typical household from October, under the new price cap announced by the regulator Ofgem.

  3. 'We need to plan financially for winter’

    Elaine Doran
    Cost of living producer

    Thomas Cross and Jenny Hunter

    Thomas and Jenny are both nurses who are on a prepayment meter.

    “We are paying about £300-£400 for our energy in the winter time so we’ve got to plan financially,” Thomas says.

    “We are worried about it, we are thinking ahead, with the mortgage and the energy bills and the cost of living going up it’s going to be quite tight for us.”

    But he says there are families in far worse situations than theirs.

    “We are on a good wage so I feel sorry for the people who are getting paid minimum wage,” he says.

    “Those are the people I’m thinking of coming into this winter.”

  4. When will energy bills come down?

    In 2021, the typical household paid £1,138 a year for gas and electricity.

    Prices rose sharply when demand for gas increased when Covid restrictions were lifted.

    Then Russia invaded Ukraine which disrupted supply and pushed up demand, and therefore the price of gas from other countries.

    Consultancy firm Cornwall Insight does not expect energy prices to return to pre-Covid levels before the end of the decade at the earliest.

    Senior consultant Kate Mulvany told Radio 4’s Today programme that while wholesale energy prices had been falling, the drop in bills from October will probably be a little less than consumers were hoping for.

    "Unfortunately... our forecasting to the end of this decade is that prices are going to stay higher than people were used to before the energy price crisis," she said.

  5. Who the energy price cap applies to

    • About 29 million households in England, Scotland and Wales on variable or default deals
    • A very small number of households are still on fixed deals so they won’t be affected
    • Energy is regulated separately in Northern Ireland, where bills are slightly lower
    • The price change applies to those who pay via direct debit or a prepayment meter
    • However, those who pay via cash, cheque or bank transfer, usually every three months, will pay significantly more. Ofgem says these customers are more likely to fall into arrears

  6. Graphic showing how different households will pay different energy bills.

  7. What is a typical household?

    The figure we’ll get at 07:00 BST will be what a typical household pays per year on its gas and electricity bill.

    But most households do not use a typical amount of gas and electricity.

    Bills are based on how much energy a household actually uses, which depends on the number of people, the type of property and its energy efficiency.

    The 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.

  8. What is the energy price cap?

    Smart meter showing gas useEPA

    The energy price cap is the maximum amount suppliers can charge households on a standard tariff per unit of energy.

    It is set every three months by the energy industry regulator Ofgem and applies to England, Wales and Scotland.

    The government has also brought prepayment energy charges in line with the price cap.

    Currently a typical household pays £2,074 a year on its gas and electricity bill, but the actual amount paid will vary depending on the amount of gas and electricity you use.

    Today Ofgem will announce the figure that will kick in from October to December and consultancy firm Cornwall Insight has forecast a drop to £1,926.

    That would mean the typical household’s bill would come down by £148 - however this year there is no £400 winter support from government.

  9. Good morning

    Marita Moloney
    Live reporter

    Welcome to our live coverage of this morning’s energy price cap announcement, which will tell us how much households can expect to pay for gas and electricity from October.

    At 07:00 BST, energy watchdog Ofgem will announce the new cap on prices for homes in England, Scotland and Wales.

    We're expecting a drop – if we get one, bills for millions of households will go down.

    But last winter’s £400 energy bill support from government has ended, meaning many will not feel better off.

    I’m here in London with colleagues from our Money and Work team, and together we'll bring you the announcement, the reaction and expert analysis on what this means for you.