A small silver lining

With no immediate end in sight of inflation or rent increases, July 1st saw a small silver lining amongst the financial and cost of living gloom.

Lower prices.

The Energy Price Guarantee (EPG) was introduced to help limit the prices that would be paid for gas and electricity. Originally this support was due to end in April 2023 but as the cost of living crisis has continued, the support made available was extended until June 30th 2023. The EPG ensured that the average bill would be no higher than £2,500 a year for the average household. The Government would then subsidise the cost of energy if it went above this figure.

What happened on July 1st?

The Energy Price Cap (EPC) is a cap on the unit price of your gas and electricity - not the total cost. The more you use, the higher your bill will be so there is no such thing as a maximum bill.

On July 1st, the EPC fell below the EPG which means that unit prices of gas and electricity fell by an average of 17%.

A cap on standing charges and unit rates

As mentioned above, it is very important to note there is no maximum bill, so the more you use, the more you will pay. The EPC is simply what you will pay for each unit of gas and electricity.

Whilst prices can vary slightly by region, the typical unit rate of Gas is now 7.5p per kilowatt hour (kW/h) - down from 10.3p / kW/h. Electricity has dropped from around 33p per kW/h to 30p per kW/h.

What do I need to do to get lower bills?

Most households are on a standard tariff so your prices will automatically fall from July 1st. If you’re not sure about which tariff you’re on then get in touch with your supplier to check. You may have moved to a fixed rate tariff and if that is higher than the standard rate you may wish to consider changing to a standard tariff.

Summary

Whilst the drop in gas and electricity prices is most welcome, prices are still over 50% higher than two years ago.

Finally, remember it is a cap on the unit charge, not your total bill.

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Remember the content provided in this article is for information purposes only and should not be considered as advice.