Average energy bill to fall by £230 from April, Ofgem announces

The cost for an average household in England, Scotland and Wales will fall from £1,928 to £1,690 from April 1

The average household energy bill is to fall to its lowest point in two years from April after Ofgem lowered its price cap in response to wholesale prices.

The regulator announced it is dropping its price cap by 12.3% from the current £1,928 for a typical dual fuel household in England, Scotland and Wales to £1,690, a drop of £238 over the course of a year or around £20 a month.

Ofgem said the fall in the price cap would see energy charges reach the lowest level since Russia’s invasion of Ukraine in February 2022, which caused a spike in the wholesale market, driving up costs for suppliers and customers.

ITV News Consumer Editor Chris Choi's expert analysis on what the energy price cap means for your bills:

Good news and bad in todays energy price cap.

Although this is being pitched as good news by energy officials - let’s not forget that energy prices even at these new levels beginning in April are higher than the start of 2022.

And we now have record energy debt figures approaching £3 billion. So the plain fact is energy prices remain unaffordable for millions.

Earlier I spoke to Jonathan Brearley, the head of Ofgem, which sets the price cap. I asked what he is going to do about the huge and unprecedented levels of energy debt that have built up. He says that “within weeks” a new inquiry into energy affordability will be started. In the detail of the new price cap, two things stand out. From April, bill payers will be charged £17 extra each to help pay off the bills of people who haven’t been able to pay what they owe. So in a very direct monetary way, energy debt is the problem of all bill payers. Also standing charges are rising again. This is the part of your bill that stays the same even if you cut your energy useage. Energy officials say they are consulting on possible changes to standing charges. At this stage, it looks like officials have plenty of consultations but few agreed solutions on this mountain of energy debt.

Ofgem chief executive Jonathan Brearley called the drop "good news" but warned "there are still big issues that we must tackle head-on to ensure we build a system that’s more resilient for the long term and fairer to customers."

He said the regulator is looking to address the risk of high levels of debt in the system and said it will be taking a step back to look at affordability across the market for struggling customers.

Consumer expert Martin Lewis gives his advice on what the announcement from Ofgem means, and how people can make the most of the cut in prices

Mr Brearley added that in the long term Ofgem "needs to think about what more can be done for those who simply cannot afford to pay their energy bills even as prices fall.

"As we return to something closer to normality we have an opportunity to reset and reframe the energy market to make sure it’s ready to protect customers if prices rise again.”

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