Ofgem energy price cap announcement will be made this month - date confirmed

04 August 2023 , 12:24

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The Ofgem price cap will soon be updated again (Image: PA)

Households will soon find out if their energy bills will fall this winter as Ofgem prepares to make its latest price cap announcement.

At the moment, a typical household with average energy use pays £2,074 a year under the current price cap, which will run until September 30. Analysts at Cornwall Insight currently expect the price cap to then fall to £1,860 from October 1 - although this prediction could change over the next few weeks.

Ofgem will officially announce its next price cap on August 25 and this will cover from October 1 to December 31. But it's important to remember there isn’t a total cap on how much you can pay for energy.

The headline figure used when talking about the price cap just illustrates what someone with typical usage is likely to pay over a year. The price cap - which is based on wholesale prices during an assessment period - actually sets the unit rates you’re charged for gas and electricity, as well as the standing charges.

This means you can end up paying more or less for energy compared to the price cap figure, depending on how much energy you use and how you pay your bill. If you pay by direct debit, the average unit rate for gas is 7.51p per kilowatt hour (kWh) and 30.11p per kWh for electricity.

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The standing charge - a fixed daily amount you have to pay for energy, no matter how much you use - for both gas and electricity remains at 29.11p per day. If you’re a prepayment customer or you pay on receipt of bill, your unit rates and standing charges are slightly different.

The price cap for prepayment customers is currently £2,046 a year and for those who pay on receipt of bill, the price cap is £2,211. There are regional differences as well with the price cap, with the above figures used to give an average across England, Scotland and Wales.

The current assessment period for which the price cap will be based on is from May 19 to August 17. You'll be on the price cap if you're on a standard variable rate (SVR) deal - so normally households that aren't fixed into a tariff.

Levi Winchester