Energy bills set to decrease, offering households a £122 savings
Energy Price Cap in Britain Set to Fall in July 2023
The energy price cap in Britain is set for a decrease from its current level, with the new cap expected to be £1,568 per year for an average dual-fuel household. This reduction represents a 7% decrease from the current cap of £1,690.
The change will take effect from July 2023 and will last until the end of September 2023. This relief comes as a welcome respite for millions of households across the UK who have been grappling with high energy bills.
However, this temporary reduction is not an indication of a long-term trend. Analysts predict that the price cap will increase slightly in October 2023 before falling again in January 2025. Beyond winter and into early 2026, the price cap is expected to remain relatively stable or see modest increases.
The current energy crisis has left many households in a state of fuel poverty, with the majority having to make difficult choices between basic essentials such as food and paying their energy bills. According to recent estimates, in England alone, there were 13% of households, or 3.17 million, in fuel poverty.
The Government has taken steps to alleviate the burden on households. In addition to subsidizing bills to keep them at £2,500 during a certain period, they have launched a £1bn scheme to help families save on energy bills. They have also announced an £80m scheme for social housing upgrades to cut energy bills.
The cost of living and the UK's energy security may be key election issues in the upcoming election, with the parties' approach to tackling these issues likely to be under scrutiny. The ongoing vulnerability to global events, cold weather risk, and the current UK gas storage at about 85% capacity mean that the energy market remains volatile, and these forecasts can change quickly.
[1] Ofgem, Energy Price Cap, https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/energy-price-cap
[2] Cornwall Insight, Energy Price Cap Forecast, https://www.cornwallinsight.com/insight/energy-price-cap-forecast/
[3] BBC News, Energy price cap: What is it and when will it change?, https://www.bbc.co.uk/news/business-61446313
[4] British Gas, Energy Price Cap, https://www.britishgas.co.uk/help-and-support/meter-billing/energy-price-cap/
[5] EDF Energy, Energy Price Cap, https://www.edfenergy.com/help/prices/energy-price-cap
1. The Government's £1bn scheme, aimed at helping families save on energy bills, could significantly impact personal-finance management for millions of households.2. As the energy price cap in Britain is set to fluctuate in the coming years, it's crucial for households to budget accordingly, ensuring their housing expenses align with their personal-finance plan.
