Energy price cap Scotland: Why homeowners may not be any better off despite average energy bills to fall below £2,000 in the autumn

Ofgem says the energy price cap will fall by £151

Energy bills are set to fall slightly to under £2,000 in the autumn.

The energy regulator Ofgem has announced bills for a typical household will reduce to £1,923 a year in the three months from October.

The current annual energy bill is £2,074, meaning an average household can expect to save £151 when the new price cap comes in.

The average energy bill will drop to below £2,000 from October. Image: Peter Byrne/Press Association.

The price cap governs the price per unit of energy as opposed to a person’s total energy bill, meaning many in colder parts of the country, or the elderly and those with small children, may find themselves spending more than £1,923 a year as they will use more units of energy.

This means the price of gas will fall from 7.5p per kilowatt hour to 6.89p, and the price of electricity will fall from 30.1p per kWh.

Jonathan Brearley, chief executive of Ofgem, said “this winter is going to be tough” as prices are still high. This drop is still hundreds of pounds higher than the average energy bill in the winter of 2021, which was just £1,277.

Speaking on BBC Breakfast, he said: “I recognise that prices are way higher than they were a year-and-a-half ago and many households are going to continue to struggle.”

He then spoke on ITV’s Good Morning Britain, where he said the UK Government needed to look at a system of pricing regulation to find a better alternative.

Mr Brearley said: “We need to play our part to protect that proportion of customers who are really, really going to struggle.

"Yes, things are better. They are better than they were last year, on average, but as you say, there is a group of customers who are going to struggle.”

Many charities which are trying to support people through the cost-of-living crisis say the savings people will make will be offset by a rise in the daily standing charge and the end of a £400 universal support payment from the UK Government.

Cost-of-living support payments for those on low incomes and certain benefits will continue. The standing charge for electricity will be 53.37p per day and 29.62p per day for gas.

Kevin Brown, a savings specialist at Scottish Friendly, said: “The truth of the matter is [the energy price cap] remains well above levels seen before the cost-of-living crisis. The average household will be paying over £500 more than they were in October 2021.

“On top of that, households will not be receiving the £400 discount that they did last winter, which means a lot of people are likely to be no better off.

“It’s going to be another tough few months for a lot of families who, unlike last year, are also grappling with higher mortgage rates and other increased borrowing costs.”

Mr Brown said families should “do what they can now” to prepare for an increase in bills over the winter.

This message is echoed by Citizens Advice, with the agency’s head of energy policy Gillian Cooper saying: “Increasing numbers of people we help are in a negative budget, where they simply don’t have enough money coming in to cover even just their essential bills.

“The next few months will push households like these over the edge. Our data suggests it will be as bad, if not worse, than last winter.”

Both Citizens Advice and the think-tank Resolution Foundation say the UK Government needs to “up its game” when it comes to tackling the soaring price of energy bills. But what can the UK Government do here to help make things better?

Ed Miliband, Labour’s shadow climate change secretary, said the figures showed the “scandalous Tory cost-of-living crisis is still raging”.

He said: “Thirteen years of failed Tory energy policy has left Britain as the most exposed economy in Western Europe to the effects of [Vladimir] Putin’s war and Britain's families and businesses are paying the price.

“Higher energy bills are unfortunately here to stay under the Conservatives – even with this fall, bills are significantly higher than they were only three years ago.

“The problem is the Tories have learnt no lessons from this crisis. They continue to side with the oil and gas companies making record profits over hard-working British families, with their refusal to fix the gaping loopholes in the windfall tax or make the spring we need for clean power, keeping the onshore wind ban and failing to insulate homes.

“Labour would act to close loophole and bring in a proper windfall tax on oil and gas giants to help tackle the cost-of-living crisis, alongside our plan to make Britain a clean energy superpower so we can lower bills for families and businesses.”

Connor Schwartz, warm homes campaigner at Friends of the Earth, said: “People in the most vulnerable situations and those on lower incomes living in cold, heat-leaking homes have months of hardship ahead, unless the Government acts now to end our reliance on expensive, polluting gas and makes our energy system fairer and greener.

“It’s a disgrace that the oil and gas companies fuelling the energy and climate crises are celebrating record profits while some of that money could be used to support the hardest-hit communities and cut harmful emissions by finding crucial energy efficiency upgrades for millions of homes.”

However, the UK Government insists these figures show their efforts to lower inflation are working.

Energy minister Andrew Bowie told the BBC: “We should welcome the fact this is down £580 from the peak, but I understand for many £1,900 is incredibly high. That’s why this Government is very clear, those most in need and those receiving benefits will continue to receive the support they need to pay their energy bills.

“We paid half of people’s energy bills over the last winter and that cost £40 billion, so we will take action to support the British people when required.”