Energy regulator Ofgem has announced that the price cap will be set at £2,074 for a dual fuel household paying by direct debit based on typical consumption.

The new price cap from 1 July represents a saving of more than £400 with the energy price guarantee which has been in place since October 2022 and caps the typical bill at £2,500.

Today’s update means that, for the first time since the global gas crisis took hold more than 18 months ago, prices are falling for customers on default tariffs.

The savings can now be passed on to customers more quickly, as Ofgem is now updating the price cap quarterly rather than every six months.  

At its peak, the price cap reached £4,279 and, whilst today’s level is lower than last quarter, it is still above the levels it was before the energy crisis took hold, meaning many households could still struggle to pay bills.  

While the price cap has dropped from its winter peak, it remains well above the pre-2021 average, and many people will still find such high bills difficult to pay.

Earlier this year, Ofgem CEO Jonathan Brearley highlighted that many households continue to struggle to afford their energy bill – therefore more focus will be needed for government, the regulator and the industry to support the most vulnerable groups this winter.

* Figures are for typical domestic consumption paying by direct debit, and will vary based on actual household usage.