Energy bills predicted to fall further this year as price of gas tumbles

13 January 2023 , 10:56

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Energy bills predicted to fall further this year as price of gas tumbles

Energy bills could fall further than previously forecast this year, in what would be welcome news for struggling households.

Finance firm Investec predicts the Ofgem price cap on energy bills could fall to £3,317 in April, then £2,478 in July and £2,546 in October.

The price cap is currently set at £4,279 for someone with typical energy use, having risen on January 1 from £3,549. But no one currently pays this.

At the moment, families are covered by the Energy Price Guarantee which has “frozen” the typical bill at £2,500.

This will rise in April to £3,000 but the new predictions from Investec could mean that the typical call falls below this from July.

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The price of gas has been a worry for families (Getty Images/iStockphoto)

Of course, these are just guesses - no one know for sure just yet how energy prices will fluctuate over the next few weeks and months.

The new predictions are lower than figures released by energy consultancy Cornwall Insight earlier this month, who said the typical annual bill could fall to £2,800 in the summer.

However, bills remain far higher than before the start of the energy crisis in 2021, when households were typically paying £1,277.

The lower price cap forecast is linked to a drop in the price of wholesale gas.

The price of gas rocketed after Russia invaded Ukraine last year but wholesale costs have now fallen to pre-war levels due to warmer weather in Europe and higher levels of storage.

Energy bills could fall this summer (Getty Images)

The term “price cap” when speaking about energy is often confusing as there isn’t actually a total cap on what you can pay for gas and electricity.

Instead, both the price cap and Energy Price Guarantee set a limit on the unit rates you can be charged for gas and electricity and the standing charges.

The £2,500 figure via the Energy Price Guarantee is just used to illustrate how much the typical household will pay

Your energy bill depends on how much gas and electricity you use, where you live, and your supplier.

If you're worried about paying for energy, we've rounded up all the help available - included grants worth up to £1,500.

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Lowering your energy consumption has been touted as the best way to slash your bill, by doing simple things like turning lights off when you leave a room and unplugging "vampire" appliances.

Levi Winchester