The July 2024 energy price cap is now in effect, with the annual bill for the average household falling by around 7% to £1,568 a year.
This is welcome news for households on variable energy tariffs. The typical household will see bills drop by £122 a year compared to the previous price cap.
Looking further ahead, the price cap is expected to rise in October by approximately 12%. This is encouraging many to opt for a fixed-rate energy tariff of at least 12 months, protecting themselves from further price jumps.
What is the energy price cap?
The energy price cap is a maximum limit placed on how much energy companies can charge their customers on default tariffs.
Every three months Ofgem adjusts the cap based on wholesale energy prices. The most recent adjustment was made on July 1st.
Energy bills are based on consumption, so Ofgem expresses the price cap as the average bill for a 3-4 person household, based on estimated use.
Read more about the energy price cap.
What is the July 2024 energy price cap?
Based on average consumption, a typical household will spend £1,568 a year on energy under the new price cap.
These are the new average unit rates and standing charges for the July 2024 energy price cap.
Â
|
 |
Gas |
Electricity |
|
Unit Rate |
5.48 p/kWh |
22.36 p/kWh |
|
Daily Standing Charge |
31.41p |
60.12p |
Figures are rounded to two decimal places and based on the average for people in England, Scotland and Wales average paying by Direct Debit. These prices include VAT. Unit rate prices shown are in pence per kilowatt-hour.
How will the price cap change in October?
The July 2024 energy price cap is now in place, but the future of energy prices is less certain.
Industry analysts Cornwall Insight predicts that the October 1st price cap will rise by 12%, the equivalent of a 4% rise to the current price cap.
Looking further ahead the figures become harder to predict. Currently, the expectation is that the January price cap will stay level at slightly higher than the current cap.
Should I switch to a fixed-rate energy tariff?
Under a fixed-rate tariff, your energy prices remain the same as long as you are under contract. Your bills are still based on what you use, but the unit prices and standing charges do not change.
With energy prices expected to rise in October, you may be able to save on your bills over the next year by opting for a fixed tariff.
The other advantage is the certainty of knowing what you’ll pay. While the energy market has been more stable recently many consumers are still wary after the sudden price jumps during the UK energy crisis.
Interested in comparing energy tariffs? Book a free call with Please Connect Me and let one of our friendly Connections Experts answer all your questions.
