What is the Ofgem energy price cap and how much are bills falling?
Gas and electricity prices will fall by 7% in England, Scotland and Wales on 1 July.
Under the new energy price cap, the typical annual dual-fuel bill paid by direct debit will be £1,568 per year.
However, while bills will be at their lowest for two years, they remain about £400 higher than they were three years ago.
What is the energy price cap?
The energy price cap covers 28 million households in England, Wales and Scotland and is set every three months by the energy regulator Ofgem.
It fixes the maximum price that can be charged for each unit of energy on a standard - or default - tariff for a typical dual-fuel household which pays by direct debit.
Between 1 July and 30 September, gas prices will be capped at 5.48p per kilowatt hour (kWh), and electricity at 22.36p per kWh.
The cap does not apply in Northern Ireland, which has its own energy market. Prices are also falling there.
How much is my bill likely to go down?
From 1 July, a dual-fuel direct debit household using a typical amount of energy will pay £1,568 per year, a drop of £122.
Typical bills for those who pay their bills every three months by cash or cheque will fall by £129 to £1,668.
What is a typical household?
Your energy bill depends on the overall amount of gas and electricity you use, and how you pay.
The type of property you live in, how energy efficient it is, and how many people live there, are also relevant.
The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single contract for gas and electricity, which they settle by direct debit.
The vast majority of people pay their bill this way, to help spread payments across the year.
Those who pay every three months by cash and cheque are charged more.
In March, Ofgem said it was considering a range of options for changing the current energy cap system, including charging different prices throughout the day to reflect periods of high demand.
What is happening to prepayment customers?
From 1 July households on prepayment meters will pay slightly less than those on direct debit, with a typical bill of £1,522, a drop of £121.
Since April they have paid the same as those on direct debit, but were previously charged more.
About four million households had prepayment meters in April 2024, according to Ofgem.
Many have been in place for years, but some were installed more recently after customers struggled to pay higher bills.
New rules mean suppliers must give customers more opportunity to clear their debts before switching them to a meter, and they cannot be installed at all in certain households.
What are standing charges and how are they changing?
Although the overall cap has fallen, standing charges - a fixed daily amount which covers the costs of connecting to a supply - are staying the same.
These are typically 60p a day for electricity and 31p a day for gas, although they vary by region.
Campaigners including the financial journalist Martin Lewis have said these charges are unfair because they make up a disproportionately large part of the bill of low energy users.
Ofgem said tens of thousands of customers responded to its recent consultation about how the charges work.
Separately, the regulator is also adding £28 to everyone's bill over the year to cover the cost of dealing with £3.1bn of debt that customers owe to suppliers.
Should I fix my energy prices?
The fall in energy prices raised hopes that suppliers would offer cheaper, fixed-price deals.
These offer certainty for a set period, but if prices drop further, people could find themselves stuck at the higher price.
Analysts at the consultancy Cornwall Insight have forecast that typical bills will rise to £1,762 in October, staying at that level in January. However, the reality may be different.
When considering fixed-price deals, Ofgem says people should seek independent advice and consider what is most important for them - the lowest price or the security of a fixed deal.
Price comparison website Uswitch warned customers to check whether fixed deals had exit fees before signing up.
What financial help is available for energy bills?
Certain groups - such as pensioners and those on some means-tested or disability benefits - received extra cost-of-living payments when bills soared after the pandemic.
But much of that extra support has ended.
The £500m Household Support Fund, which was introduced in September 2021 to help vulnerable customers, had been due to end in March 2024.
However, Chancellor Jeremy Hunt announced a six-month extension in the spring Budget.
The Warm Home Discount scheme continues to offer a discount to eligible pensioners and low income households.
The government's Fuel Direct Scheme can help people to repay an energy debt directly from their benefit payments.
In addition, suppliers must offer customers affordable payment plans or repayment holidays if they are struggling with bills.
Most suppliers also offer hardship grants.
The energy support scheme for businesses, which offered firms a discount on wholesale prices, ended in March 2024.
