Millions of households will see their energy bills come down from April thanks to a lowering of price caps by the UK’s energy regulator.
Ofgem’s default price cap is to be brought down by £17 in response to falls in wholesale energy prices.
For the upcoming summer period, which runs from April to September, the default price cap set by Ofgem will be £1,162, having previously been set at £1,179.
Around 11 million households are estimated to be impacted by the default price cap, while a further four million users of pre-payment meters will also see their energy costs come down later this year.
The cap on prices for pre-payment meters will come down from £1,217 to £1,200 from April, the regulator has said.
The idea behind the default price cap is to keep costs down for consumers who might otherwise have found themselves paying more for their energy supplies because they don’t routinely switch to the cheapest deals available to them.
Nonetheless, Ofgem advises people to shop around and be aware of better deals on gas and electricity supplies that are available.
The default price cap has been in place since January 2019 and is estimated to have saved households nationwide somewhere in the region of £1 billion so far.
Jonathan Brearley, Ofgem’s chief executive, has said that the price cap introduced early last year has meant that “suppliers have been required to become more efficient and pass on savings to consumers”.
He added that “switching rates” among energy consumers has never been higher than they were last year, and described the news about incoming reductions to the price cap as “further good news” for the 15 million or so households who look set to benefit.
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