New energy measures that could save families over £200
Amber Middleton
Content writerThe government's new energy price cap could cut energy bills by £200 – see if you're affected
Millions of families will be paying less in their monthly energy bills due to latest Ofgem changes.
The energy price cap is being lowered, meaning households across the country will see their energy bills fall from April.
This will be the lowest energy bills have been in two years with families on average, paying £238 less for their bills annually than the current rate.
However, some are arguing that this is not enough and the government need to be doing more.
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Why are bills being reduced?
Energy bills are coming down because Ofgem's energy price cap is dropping from £1,928 to £1,690 per year for a typical dual fuel household.
This means that families on average will be paying £238 less on their energy bills (annually) from April and this rate will stay in place until the price cap changes again at the beginning of July.
This comes after the price cap previously rose from 1 January this year.
What is the energy price cap?
Ofgem is Britain’s independent energy regulator, which sets the energy price cap so that people aren't paying too much for their electricity or gas.
The energy price cap is a limit on the amount suppliers can charge you for each unit of electricity or gas you use. This price cap was first introduced in 2019 amid concerns people were paying too much for their energy.
The cap changes four times a year – on 1 January, 1 April, 1 July and 1 October.
When will I see the reduction?
The price cap will affect families from 1 April.
What will these reductions look like for me?
The price cap will affect you if:
- You’re on a default energy tariff
The price cap won't affect you if:
- You’re on a fixed-term energy tariff
- Your tariff is exempt from the price cap
Speak to your energy supplier if you're unsure if you'll be affected.
The average household will see their annual bill reduced by £238.
'Many people will struggle'
Despite the fall in the cap, some are arguing that it isn't enough to help poorer families, with the average annual cost of £1,690 still far higher than the rate in winter 2020 – £993.
Dame Clare Moriarty, Chief Executive of Citizens Advice said: 'We know more than five million people live in households behind on their energy bills and, with the price of energy still far higher than just three years ago, many people will struggle to pay off these debts.
'The government promised a new plan for energy bill support by April 2024 but will miss its own deadline. And the withdrawal of cost of living payments this spring will make it so much harder for many of those already finding it difficult to make ends meet.
'Without action, people will face a cycle of winter crises year after year.'
This comes after the government recently ended the cost of living payments that were given to low-income families over the past two years to help with rising living costs.
In addition to this, the 'standing charge' – a cost you have to pay to stay connected to your network on top of your unit rate – is rising from 53.35p a day to 60.10p. You have to pay this whether or not you use any energy and will also affect your energy bills.
Where can I get help on my energy bills?
If you're struggling to pay your energy bills, speak to your energy provider. They have an obligation, under Ofgem to help you out, whether it's payment plans, help to pay off your debt, payment reductions or more.
Many energy companies also provide access to hardship funds for vulnerable customers. Some of these grants can be worth up to £1,500.
Examples of grants include the British Gas Energy Support Fund, which offers money to help customers clear gas and electricity debt, but Scottish Power also offer a similar scheme through its Hardship Fund.
EDF, E.ON and Octopus Energy also offer similar grants.
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