What does Ofgem’s price cap mean for my energy bills?

The typical household energy bill will fall to its lowest level for two years from April but will still remain well above pre-pandemic levels. What can households expect over the coming months, and are years of exorbitant energy bills finally coming to an end? – What is Ofgem’s price cap? The energy price cap was introduced by the Government in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use. It aims to ensure that prices for customers on default energy tariffs are a fair reflection of the cost paid by suppliers for wholesale energy, and that the profit firms make is capped. Ofgem sets its cap every three months as the average amount paid by the typical household. It is important to note though that Ofgem’s cap does not set a maximum amount for the actual bill households receive – those who use more than the average amount will pay more, and those who use less will pay less. Energy is regulated separately in Northern Ireland, where prices are also falling. – Why is Ofgem’s price cap falling? The fall reflects drops...

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