Home Money Good news as energy bills are set to fall to to their lowest level in TWO YEARS – but will still cost the average home £1,635

Good news as energy bills are set to fall to to their lowest level in TWO YEARS – but will still cost the average home £1,635

by Elijah
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Feed the meter: Energy bills have been high since late 2021, when prices started to skyrocket
  • Ofgem price cap likely to fall by £293 a year in April, says Cornwall Insight
  • Although any reduction in energy bills is welcome, prices are far above pre-2021 levels.

Experts believe energy bills will fall in April, but only by 15 per cent, or £293, to £1,635 a year.

The average household currently pays £1,928 a year for gas and electricity bills as they are subject to a tariff regulated by Ofgem’s price cap, which is set four times a year.

But expert energy analysts at Cornwall Insight believe the peak price will fall to £1,635 a year from April 1.

This rate applies to a home with average energy consumption, at a variable energy rate and paid by direct debit.

The current price cap sets the energy bills paid by more than 80 per cent of UK households, although the exact amount varies depending on gas and electricity usage.

Feed the meter: Energy bills have been high since late 2021, when prices started to skyrocket

The maximum price is reset in July and again in October.

Cornwall Insight believes the average gas and electricity bill will fall back to £1,465.07 in July, before rising to £1,523.95 in October.

Cornwall Insight principal consultant Craig Lowery said: ‘Forecasts show energy bills will return to their lowest levels in more than two years, providing much-needed respite for a nation battling a cost-of-living crisis.

‘Pretty healthy gas supplies across the Atlantic, coupled with high storage levels in Europe, are helping to keep bills down. But we must not become too complacent. Our energy system is still walking a tightrope and we can’t be sure that another political or economic crisis won’t cause bills to go up again.

‘Even with the fall, prices will continue to be a struggle for many. “We must remember that bills are still hundreds of pounds above pre-pandemic levels, and if we do not accelerate the shift to sustainable energy and reduce volatile imports, they are likely to remain that way.”

Tempted to fix it? What to consider…

With more and more energy providers now offering fixed energy tariffs, many households might be considering subscribing to one once again. writes Sam Barker.

Before taking the step, it is vital to consider these four steps:

1. Make sure the deal is good

To determine whether an energy deal (fixed or not) is cheaper than what you pay now, compare the unit rate and standing charge with what you currently pay.

There are several fixed-rate energy deals that are more expensive than staying at Ofgem’s price cap.

The average household pays rates capped by this price cap, meaning 53p per day in permanent electricity charges and 30p for gas, while unit electricity rates are 29p per kilowatt-hour (kWh) and 7p /kWh for gas.

The massive variable is what will happen to Ofgem’s price cap in the future.

It might be possible to close a cheaper deal now, only to see the maximum price drop significantly, causing you to overpay.

2. Remember to check departure rates

Many fixed-rate energy deals come with high exit fees, which you will pay if you try to leave the deal early.

These can reach £150 each for gas and electricity.

3. Check your emails

At the moment there are very few fixed rate energy deals on the open market.

But many energy companies have some solutions that are only available to their existing customers.

They advertise these by sending emails to their customers, so remember to check all emails from your energy company.

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