Gas and electricity bills fall by £122 a year for average household

Gas and electricity bills fall by £122 a year for average household

Gas and electricity bills have fallen by the equivalent of £122 a year for the average household - just days before the General Election in a boost for Rishi Sunak.

The energy price in Britain cap set by regulator Ofgem dropped by 7 per cent this morning, which translates into a fall in annual dual fuel bills from £1,690 to £1,568.

This is the lowest level since winter 2021/22 - before the surge that follow Russia's invasion of Ukraine - and is about £500 lower than a year ago, when it was £2,074.

Some 10million households have now been urged to send energy meter readings to their supplier as cheaper prices come into effect in England, Scotland and Wales.

Britons on a standard variable tariff - as opposed to a fixed deal - and who do not have a smart meter should submit their electricity and gas readings to their supplier as close as possible to July 1 to ensure they are billed accurately at the lower prices.

Those who do not submit readings risk having some of their usage after this date charged at the previous, more expensive rates.

Suppliers who have not received meter readings base their bills on estimated usage, meaning households could be overpaying, while others may not be paying enough.

The Conservatives are using a drop in the energy price cap to warn of a Labour 'triple whammy' of job losses, higher taxes and poor investment which they claim would arise from the opposition party's plans to boost green power.

Labour said the drop was no cause for celebration for the Tories, criticising Energy Secretary Claire Coutinho who it said 'wants a round of applause even though energy bills are still hundreds of pounds a year higher for families than they were, and are forecast to rise again this autumn.'

Ms Coutinho said 'only the Conservatives have a plan to protect our energy security,' while a Labour spokesperson highlighted the party's plan to set up GB Energy, a new publicly-owned company to invest in homegrown clean energy so we can boost energy independence and cut bills for good.

Ofgem changes the price cap every three months based on several factors, the most important of which is the price of energy on wholesale markets.

The price cap does not limit a household's total bills, and people still pay for each unit of gas and electricity they use. The figures provided are just for an average-use household.

Ofgem is currently reviewing the price cap and looking at how it is calculated.

This includes mulling over changes to standing charges, which are fixed daily charges that cover the cost of supply connections.

The average household is expected to spend £83 on energy in July, compared with £127 in June, due to the lower cap and lower usage due to warmer weather, comparison site Uswitch calculated.

The latest fall offers further relief to households given the previous quarter-on-quarter drop seen in April, but analysts have said they expect Ofgem to increase the price cap in October, before dropping it again in January 2025.

Uswitch also urged households to investigate other tariffs, including fixed deals, to beat the predicted October price hikes.

Ben Gallizzi, energy spokesman at Uswitch, said: 'There are a number of fixed tariffs worth considering right now.

'By opting for a fixed deal, you're locking in those rates for the duration - usually 12 months - which means households could have price certainty and avoid the ups and downs of the price cap.'

Simon Francis, coordinator of the group, said: 'Throughout the energy bills crisis we have seen sluggish progress on insulating and ventilating our homes, bringing down standing charges, moving to cheaper energy sources and bringing in comprehensive support for vulnerable households with their energy bills.

'Had we seen more concerted action on all these fronts, then the Ofgem price cap coming into force on 1 July would be £1,071.98 - £496.62 lower than what the average household is going to be paying.

'Given energy bills will stay high for the foreseeable future we now need the next Government to act quickly after the election to end energy debt, protect households from the volatile global energy market, bring down bills for good, improve housing standards and make Britain a clean energy nation.'