Martin Lewis says energy costs will drop within hours but there's a lot you need to know

Martin Lewis has shared some tips ahead of the new energy price cap expected to be confirmed by Ofgem on Thursday morning. The industry regulator is expected to announce a £450 drop to its energy price cap from July 1, but there have been warnings that people are likely to feel little benefit to their household finances.

Writing in the latest edition of the MoneySavingExpert.com newsletter (MSE.com), Martin said Cornwall Insight predicted the price cap would “likely drop 35 - 40 per cent, but what we pay will drop an average 15 - 20 per cent”. In monetary-terms, this would be a decrease of £446 on the UK Government’s £2,500 Energy price Guarantee, taking it to £2,054 a year - based on falling wholesale energy prices.

The cap is mostly based on wholesale energy rates from mid-Feb to mid-May. However, he has reminded people that it it's a cap on the underlying rates, so if you use more, you pay more, reports The Daily Record.