Ofgem to lower cap on energy bills from October 1
Energy industry watchdog Ofgem has said that it will lower the annual price cap on energy bills to £1,042 per household from October 1, the Telegraph reports.
It said that 15 million households on default energy tariffs and prepayment metres would benefit from the changes, with consumers on default plans saving around £84 and prepayment customers saving around £95.
The £1,042 per year cap, which will be in place from October 2020 to March 2021, is its lowest level since the policy was implemented in January 2019.
Ofgem said that it decided to reduce the cap amid falling wholesale gas prices since it last reviewed and updated the limit in February of this year.
Ofgem’s chief executive Jonathan Brearley said: "Millions of households, many of whom face financial hardship due to the Covid-19 crisis, will see big savings on their energy bills this winter when the level of the cap is reduced.
"They can also reduce their energy bills further by shopping around for a better deal. Ofgem will continue to protect consumers in the difficult months ahead as we work with industry and government to build a greener, fairer energy market."
Wholesale gas prices hit a 20-year low in the spring of this year as the Covid-19 pandemic saw energy demand fall, yet they have begun now to regain traction with the cap likely to be raised in April 2021 following its next review should this upward trend continue.