Energy regulator Ofgem has lowered winter energy bills for 15 million UK homes by reducing its energy price cap to record lows after wholesale energy market prices toppled during the Covid pandemic. The agency will lower the cap on default dual-fuel energy tariffs for 11million households by £84, from an average of £1,126 a year to a record low of £1,042 from this October. It will also lower the cap on energy bills for customers using pre-payment energy meters by an average of £94 a year, from £1,164 to £1,070 a year.
The energy price cap will fall to its lowest level since it was introduced in January 2019. Ofgem adjusts the cap on energy bill every six months to ensure fair energy bills, which reflect energy company costs. Energy market prices tumbled to 20 year lows during the Covid lockdown, despite households using more energy while staying at home, after energy-hungry factories, offices, schools and restaurants shut.
Chief executive of Ofgem, Jonathan Brearley said, “Millions of households, many of whom face financial hardship due to the Covid-19 crisis, will see big savings on their energy bills this winter when the level of the cap is reduced. They can also reduce their energy bills further by shopping around for a better deal. Ofgem will continue to protect consumers in the difficult months ahead as we work with industry and government to build a greener, fairer energy market.”
Energy Minister Kwasi Kwarteng said the government was “working hard to ensure consumers pay a fair price for their energy.”
