Energy regulator Ofgem has announced that starting from 1st July, the energy price cap for a typical dual fuel household will be set at £2,074 per year.
This reduction reflects the recent decrease in wholesale energy prices.
It is good news for customers on default tariffs, as prices are falling for the first time since the global gas crisis began over 18 months ago.
Ofgem now updates the price cap quarterly instead of every six months, allowing customers to benefit from savings more quickly.
However, although the new cap is lower than the previous quarter, it is still higher than before the energy crisis.
Many households may still struggle to pay their bills.
Ofgem Chief Executive Officer Jonathan Brearley has urged the government, the regulator, and the industry to focus on supporting the most vulnerable groups during the upcoming winter.
He also encouraged customers facing difficulties to contact their supplier for support options, such as payment plans or hardship funds.
Brearley emphasised that while the market is stabilising and prices are moving in the right direction, the cost-of-living crisis continues to impact many people across the country.
He mentioned that it is unlikely for prices to return to pre-crisis levels in the medium term and collaboration between the government, Ofgem, consumer groups, and the wider industry is essential to support those in need.
Energy Security Secretary Grant Shapps has expressed his satisfaction with the upcoming reduction in energy bills for households, expecting an average decrease of £430 from July.
Shapps highlighted the government’s commitment to combating inflation and ensuring energy affordability for families.
Mr Shapps said: “We’ve spent billions to protect families when prices rose over the winter covering nearly half a typical household’s energy bill – and we’re now seeing costs fall even further with wholesale energy prices down by over two-thirds since their peak as we’ve neutralised Putin’s blackmail.
“I’m relentlessly focused on reducing our reliance on foreign fossil fuels and powering-up Britain from Britain to deliver cheaper, cleaner and more secure energy.”