Ofgem’s new price cap will see bills lighter by up to £95: More than 15 million households in the UK will see energy bills fall by up to £95 a year from October.

The new level of the price cap has been announced by Ofgem, which for customers on their supplier’s standard variable tariff will be lower by £84 a year and will reach the lowest level on average annually of £1,042, from the previous £1,126.

The level of the cap for prepayment meter customers has also been lowered by the regulator, who will save £95, from £1,164 to £1,070 per year.

A sharp decrease in wholesale gas prices from the Covid-19 pandemic has squeezed energy demand resulting in the price cuts.

The price cap has been recommended by Ofgem to remain in place for next year to ensure a fair price for households continues for their energy.

The cap is likely to rise in April to reflect higher costs it warns, if wholesale energy prices continue to rise in the coming months.

The regulator has also decided to align the prepayment meter cap into the default tariff price cap to protect these households as the existing prepayment meter cap expires at the end of this year.

Chief Executive of Ofgem, Jonathan Brearley said: “Millions of households, many of whom face financial hardship due to the Covid-19 crisis, will see big savings on their energy bills this winter when the level of the cap is reduced.

“They can also reduce their energy bills further by shopping around for a better deal. Ofgem will continue to protect consumers in the difficult months ahead as we work with industry and government to build a greener, fairer energy market.”

Ofgem’s new price cap will see bills lighter by up to £95 – British Utilities