Ofgem has confirmed that that it will lower the energy price cap for domestic energy bills by 7% from 1 July to 30 September 2024 compared to the previous quarter.
According to Ofgem, an average household paying by direct debit for dual fuel will pay £1,568, down £122 over the course of a year.
However, the announcement comes as figures show that the average UK household has spent approximately £2,500 more on energy bills since April 2021 compared to the if prices had remained stable.
According to data from the End Fuel Poverty Coalition, accounting for UK Government support schemes the additional spend by households on energy across the country over the last three years totals more than £72bn.
While the new energy price cap level will mitigate the high energy costs, gas and electricity will remain 50% higher than in 2021 and are not predicted to be resolved soon.
MPs on the Energy Security and Net Zero Committee were warned by Ofgem that prices “are still significantly higher than they were before, and when we look further out our best estimate is that prices are going to stay high and volatile over time”.
Ofgem has previously expressed concern for the nation’s increased energy bills during the cost-of-living crisis.
Ofgem’s announcement follows the announced general election date, whereby the energy sector is “set to become a battleground for debate”.
Highlighting the role energy security will play in the outcome of the election, coordinator of the End Fuel Poverty Coalition Simon Francis stated: “Years of staggering energy bills have taken their toll and we now know the true cost of the crisis.
“Customers are £2,500 out of pocket because of Britain’s broken energy system, people are turning to loan sharks to pay their energy bills, millions of people are living in cold damp homes and many are experiencing a mental health crisis driven by high bills.
“The next government will need to act quickly after the election to end energy debt, protect households from the energy market, bring down bills for good, improve housing standards and make Britain a clean energy superpower.”
Additionally, Fiona Waters, spokesperson for the Warm This Winter campaign emphasised: “Even with today’s price cap reduction, people will still be paying 50% more than they were three years ago for gas and electricity.
“They are simply fed up with being ripped off and used as cash machines by the energy industry that week after week announces billions in profits. People want to see investment in a fairer system, especially during these times of global uncertainty when there could easily be another worldwide energy price shock.
“That’s why thousands have joined our Big Energy Credit Claim Back protest and
political parties should listen. Voters want to see our broken energy system mended with a shift to homegrown renewable energy and a proper insulation scheme which will both reduce bills and increase energy security by freeing us from volatile global gas prices.”
