The energy price cap is the maximum amount energy suppliers can charge you for each unit of energy you use. It’s updated every three months by energy regulator Ofgem to make sure that prices reflect changes in underlying energy costs, as well as inflation.
For the period of 1 July to 30 September 2024, the price cap is set to fall to £1,568 (-7%). This is £122 lower than the existing price cap, which is in place from 1 April to 30 June (£1,690), and will bring energy prices to their lowest level since early 2022.
However, it’s important to note that this figure represents the average a ‘typical’ household will pay. Ofgem classifies a typical or ‘medium-use household’ as those living in a 2-3 bedroom home with 2 or 3 occupants. The amount you shell out will depend on several factors, including how much energy you use, your location, and how you pay your energy bills. For instance, individuals looking for houses for sale Holyhead might want to consider these costs when planning their budgets.
Does the energy price cap affect me?
If you’re on a fixed tariff for your energy supply, there’ll be no change to how much you pay. The energy price cap is only applied if you’re on a default energy or standard variable tariff. This includes those who pay by direct debit, standard credit, prepayment meter, or who have an Economy 7 (E7) meter.
Effective from 1 October 2023, changes were made to how the discount is applied for homes that have pre-payment meters installed. Instead of being a discount to unit rates, a discount is now applied to the standing charge. If you pay by direct debit, your bills are usually estimated. So, if you’re in credit, it’s worth doing a meter reading and getting in touch with your supplier to ensure you’re paying the correct amount.
Energy price cap by payment type: April to June 2024
| Direct Debit | Prepayment | Standard Credit | Economy 7* |
|---|---|---|---|
| £1,690 | £1,643 | £1,796 | £1,125 |
Source: Ofgem. *Electricity-only tariff.
Energy price cap by payment type: July to September 2024
| Direct Debit | Prepayment | Standard Credit | Economy 7* |
|---|---|---|---|
| £1,568 | £1,522 | £1,668 | £1,037 |
Source: Ofgem. *Electricity-only tariff.
How will the price cap change impact my energy bills?
You can check the average rate charged per unit of energy below and compare that with your household energy bills to estimate your household’s energy usage.
Energy price cap: What’s the average rate charged per unit of energy used?
Gas
- Jan-Mar 2024: 7p per kWh
- Apr-Jun 2024: 6p per kWh
Electricity
- Jan-Mar 2024: 29p per kWh
- Apr-Jun 2024: 27p per kWh
- Jul-Sep 2024: 25p per kWh
Source: Ofgem, based on average rates for direct debit users, which vary by region.
Ofgem estimates a typical or ‘medium-use household’ as a two- to three-bedroom house with 2 or 3 people living in it. If you live in a flat or a one-bedroom house, your energy use is estimated to be ‘low’. And if you live in a four-bedroom home, with 4-5 people, your energy use is estimated to be ‘high’. For example, if you were to purchase a 6 bed house in Holyhead, your energy consumption would likely fall into the ‘high’ category.
| Energy use | Example – size of home & number of residents | Typical annual gas use | Typical annual electricity use |
|---|---|---|---|
| Low | Flat or 1-bed house; 1-2 people | 8,000 kWh | 1,800 kWh |
| Medium | 2-3 bed house; 2-3 people | 12,000 kWh | 2,900 kWh |
| High | 4+ bed home, 4-5 people | 17,000 kWh | 4,300 kWh |
Source: Ofgem
How much you’ll pay also depends on how energy-efficient your home is and which appliances you use – and how frequently you use them. Energy usage is calculated in kilowatt hours (kWh), or units. One kWh is enough to power a 100-watt lightbulb for 10 hours, but, in comparison, it takes 4.5 kWhs to power a single cycle of a tumble dryer.
Is there still a discount on energy bills?
This government’s Energy Bills Support Scheme – which gave all households a discount of £400 on their energy bills from late 2022 to early 2023 – has now ended. So, when you’re working out how much your bills will be compared to last year, it’s good to keep in mind that these monthly reductions won’t apply.
There are some other government-funded schemes in England, Scotland, and Wales to help with energy bills, available to certain eligible customers. One of these schemes that offers help during the winter months is the Warm Home Discount Scheme. Under previous schemes, if you get benefits, or if you or your partner gets the Guarantee Credit element of Pension Credit, you could get a discount of £150 off your electricity bill in winter, or £150 added to your prepayment meter. Alternatively, you could also get a discount on your gas bill if your supplier provides both gas and electricity.
Will there be a change to the standing charge on my bill?
The fixed standing charge you pay is just to have a connection, regardless of how much energy you use. It’s also used to cover things like maintenance of the supply network, take meter readings, and to support government and environmental schemes. The amount you’ll pay depends on your supplier, what tariff you’re on, and where you live. From January to March 2024, the average daily standing charge for electricity was around 53p a day, and 30p a day for gas. That worked out at just over £300 a year on average. From April to June 2024, this has risen to 60p a day for electricity, and 31p a day for gas.
Ofgem launched a review into standing charges in 2023, and recommendations on changes to the charge are due to be published later this year. This formal consultation will lead to a policy on standing charges.
Will energy prices keep falling?
The Energy Price Cap covers a period of three months and changes four times a year: in January, April, July, and October. Analysts at Cornwall Insight – an independent energy research, analytics, and consulting firm – forecast energy costs could rise again later in the year, so those considering houses for sale Holyhead will benefit from monitoring these trends closely.