Typical power invoice in Great Britain to fall 7% to £1,720 a 12 months from July

Energy prices will fall for tens of millions of British families this summer season after the trade watchdog reduce the associated fee cap for a standard annual dual-fuel invoice by way of 7% to £1,720.

The power regulator for Great Britain, Ofgem, stated the cap on gasoline and electrical energy fees would fall from July by way of the identical of £129 a 12 months for the common house after a pointy droop in Europe’s gasoline marketplace costs.

Despite the drop, which follows 3 consecutive quarterly will increase, the standard family will nonetheless pay about £600 a 12 months extra on their annual invoice than earlier than Russia’s invasion of Ukraine 3 years in the past.

About 9m families that purchase their power via variable price lists will see a direct affect on their expenses because the cap takes impact in July. But invoice payers may nonetheless face upper expenses in the event that they use greater than the standard quantity of power.

This is for the reason that cap, which is recalculated each and every 3 months, limits the speed power providers can price shoppers for each and every unit of gasoline and electrical energy – no longer the overall invoice.

Ofgem was once in a position to decrease the cap after a droop in gasoline marketplace costs throughout Europe, which has helped to chop prices for power providers.

The benchmark value for European gasoline tumbled from highs of virtually €58 (£49) in line with megawatt-hour (MWh) in February to simply over €31/MWh ultimate month, whilst the United Kingdom gasoline marketplace value fell from 138p in line with therm to about 78p/th.

Cheaper gasoline manner decrease prices for family heating, but it surely additionally lowers the price of electrical energy in the United Kingdom as a result of a big percentage of energy is generated in gasoline energy crops.

The new value cap is more likely to reignite the controversy over the affordability of the United Kingdom’s power. A report percentage of British families have been not able to pay their power expenses by way of direct debit ultimate month as a result of there was once no longer sufficient cash of their financial institution accounts, in line with authentic govt information.

More than 2.7% of direct debit bills for gasoline and electrical energy defaulted in April on account of inadequate finances, the most recent figures revealed by way of the Office for National Statistics have printed.

The emerging power default figures are anticipated to result in upper total power debt and arrears, which reached a report £3.8bn on the finish of September ultimate 12 months. This is greater than double the debt shouldered by way of families firstly of 2022.