The jump will equate to a rise of £18 a month for the average household using both electricity and gas, with households seeing an increase of 24% on their gas bills and 5% on their electricity bills.
The energy cap covers millions of households in England, Wales and Scotland. Regulation and bills are different in Northern Ireland.
The cap fixes the maximum amount customers can be charged for each unit of gas and electricity via variable tariffs. About 40% of bill-payers have fixed tariffs and are unaffected because their price will not change until the end of their fixed term.
The cap is illustrated by Ofgem, by calculating the annual bill for a “typical household” using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit.
Ofgem has decided to reduce what it believes to be a “typical” level of energy use, because many households have cut back owing to high prices of recent years, and energy efficiency has improved.
That could mask what remains a sharp rise in prices, and will not change the fact that consumers will pay considerably more for each unit of energy.
From July:
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The “typical” bill under current usage estimates will be £1,862 (a rise of £221 a year)
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The “typical” bill under possible new usage estimates will be £1,663. However, the current cap using those estimates would be about £1,490, so the rise would be similar
Ofgem made changes to these so-called typical domestic consumption values in 2019 and 2023.
