MILLIONS of households will see their energy bills drop this summer.
It comes after the energy regulator announced that typical gas and electricity bills will be capped at £2,074 a year from July 1.
Millions of households could see their monthly energy direct debits drop from July
The fall in Ofgem’s price cap will reward households battling the cost of living with a £426 annual saving.
This will take effect when the government’s Energy Price Guarantee, which limits the typical domestic energy bill to £2,500, expires in a month’s time.
It marks the first time consumers on default tariffs have seen prices fall since the global gas crisis took hold more than 18 months ago.
The energy price cap works by setting a limit on the maximum amount suppliers can charge for each unit of gas and electricity.
It’s not a cap on how much you can be charged for the energy that you use – so if you use more expect to pay more.
However, we’ve crunched the number to establish how much certain households will save when bills fall in July.
We’ve worked out how much a typical small, medium and large household currently pays via direct debit each month and how much they’ll pay when the price cap is reintroduced in the summer.
But don’t expect to be charged the exact figures we’ve crunched.
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These are based on national averages and it’s important to remember that the price cap is only a limit on what suppliers can charge – not how much your bills will be.
If you use more energy, expect to pay more. And if you use less, your account may be in credit and your direct debits may be reduced to reflect this.
Your monthly direct debit may also vary depending on if you’re in debt or have significant credit with your energy supplier.
A small household made up of one to two people uses around 8000kWh of gas and 1,800kWh of electricity every year.
Right now, these households pay roughly £144 a month on their energy bills.
But the same household could see their bills drop to £123 a month from July 1 – which represents a £21 a month saving.
A medium household is made up of two to three people and uses an average of 12,000kWh of gas and 2,900kWh of electricity every year.
The average monthly bill for these households under the government’s cap sits at £208 a month.
But the same household could see their bills drop to £177 a month from July 1 – which represents a £31 a month saving.
That leaves larger households often made up of four to five individuals that use roughly 17,000kWh of gas and 4,300kWh of electricity every year.
Right now monthly bills for these homes average £290.
But the same household could see their bills drop to £246 a month from July 1 – which represents a £44 a month saving.
How are gas and electricity rates changing and how can I calculate my bill?
Right now, a typical household that pays their ener …