Energy bills expected to fall by £300 to lowest level in two years from April

16 February 2024 , 11:46

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Cornwall Insight has released its final prediction before Ofgem's price cap announcement next week (Image: Getty Images)

Energy bills are predicted to fall by nearly £300 in April - with a further £170 reduction expected for the summer.

According to fresh predictions from consultancy firm Cornwall Insight, annual energy bills could plunge by 15% from the current rate of £1,928 to £1,635 in April 2024. This is a £293 drop in costs and the lowest point for two years. Today's announcement is the final one before Ofgem officially confirms its price cap next week on February 23.

According to its predictions, those on the price cap tariff will pay 23.27p per unit of electricity and 5.96p per unit of gas they use from April. This is down from the January level of 28.62p for electricity and 7.42p for gas. This forecast also includes the new £16 bad debt allowance - however, Ofgem has not yet confirmed whether this will be included in April's price cap. Today's figure is £15 more expensive than Cornwall Insight's January prediction.

As bills depend on how many energy units a household uses, those who use less will pay under £1,635, and those who use more will pay higher. According to the energy regulator, the price cap covers around 29million energy customers.

Going forward, Cornwall Insight expects the price cap to fall further by £170 in July to £1,465 before rising again to £1,523 in October. If correct, typical households will see an energy bill drop worth £463 between now and the summer with costs set to stay under the April limit for the rest of the year.

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Cornwall Insight says the caps have come down as wholesale oil and gas prices have fallen due to a "healthy gas supply" in the Atlantic and high storage levels in Europe. However, Dr Craig Lowrey, principal consultant at Cornwall Insight warned that the UK couldn't "get too complacent".

He said: "Our energy system is still walking a tightrope, and we cannot be sure another political or economic crisis won’t send bills straight back up. Even with the drop, prices will remain a struggle for many. We need to remember, bills remain hundreds of pounds above pre-pandemic levels, and if we don’t speed up the switch to sustainable energy and cut down on volatile imports, they are likely to stay that way.”

Ruby Flanagan