Energy regulator Ofgem has confirmed that the new price cap, due to be announced tomorrow, May 25, will "drop considerably" - but families will have to wait another two months before they start to see their bills fall.
After nearly two years of rises, energy experts Cornwall Insight have predicted that the price that households pay for energy will finally drop to around £2055 a year for the average family and although Ofgem has not revealed the final new price cap amount, its strategy head confirmed that "what we currently pay will come down considerably" when pressed by Martin Lewis on Good Morning Britain.
If Cornwall's predictions are correct, for every £100 you pay on energy now, you'll pay £80 - £85 from July. However, according to Martin Lewis, it's less likely that standing charges will drop, so families will still pay around £300/year just for the facility of having gas and electricity. supplied to their home, even after July.
Read more: Confusion as £400 energy bills support for households comes to an end
Most people hadn't heard of it a couple of years ago, but now the energy price cap is rarely out of the news - and at 7am tomorrow, the predictions will stop, and Ofgem will announce the new price cap, which won't start in until July 1.
Since last October, what we pay hasn't been at the price cap level, but a lower rate set by the Energy Price Guarantee (EPG), introduced by the Government due to record high energy prices. The EPG kicks in when the price cap is too high but from July, the new lower cap will likely be under the EPG level, so we'll pay that.
But up until then, households will continue to pay about £2,500 per year for average use under the EPC, a reduction from the current price cap of £3,280 a year, set in February.
And although Cornwall Insight has predicted the price cap will fall again in October to £1,976, most people will pay about as much for their energy in winter 2024 as they did during the winter just gone. This is because households paid the EPG rate of £2,500, plus received an additional £400 off their heating bills in the form of the Energy Bills Support Scheme (EBSS), meaning a total average bill of £2,100 in 2022/23 compared to a predicted bill of £19745 in winter 2023/24 - a difference of only £124 per year. And if predictions are right, families will still be paying around double or more what they did before the energy crisis hit in Autumn 2021.
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The price cap due to be announced tomorrow will stay until September 30. Another price cap, to cover the period October 1 - December 31 will be announced on August 25
But remember, the price cap is a cap on the tariff you pay, not a cap on your total bill. Ofgem estimates the typical household in Britain uses 2,900 kWh of electricity and 12,000 kWh of gas in a year, so if you use more than that, your bill will be more than the energy price cap average figure.
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