Martin Lewis: The price you pay for energy will drop considerably in July
The price households pay for energy "will drop considerably" in July, the energy regulator has confirmed to MoneySavingExpert.com founder Martin Lewis on ITV's Good Morning Britain. It comes ahead of next week's Ofgem announcement on the new Price Cap rate from 1 July, which is predicted to fall below the Government's current Energy Price Guarantee.
You can see this and Martin's further reaction to the upcoming price change in the links below:
For more information see our Energy Price Cap FAQs and Energy Price Guarantee need-to-knows. If you're struggling to pay your bills, see our Full energy help guide.
Ofgem confirms energy prices "will drop considerably" from July
The energy regulator confirmed that prices are set to drop from 1 July in an interview with Martin on ITV's Good Morning Britain, on 17 May 2023.
From ITV's Good Morning Britain on Wednesday 17 May 2023, courtesy of ITV. All rights reserved.
Here's a full transcript of the interview...
Martin Lewis: "I'm predicting a drop of 17.5% when the price cap comes out in July. Am I about right?"
Neil Kenward, energy regulator Ofgem's director for strategy and decarbonisation: "So we're not going to give figures on our price cap forecast."
Martin: "Blink once for yes, twice for no."
Mr Kenward: "We publish the price cap number next week."
Martin: "Next Thursday."
Mr Kenward: "That's right. It's obviously sensitive until then, we haven't actually finalised the number. But I can be clear that the number will be down considerably on the £2,500 limit that applies at the moment for that average annual bill."
Martin: "So the price cap will be dropping for the three months from July. I think it will be around somewhere between a 15% to 20% drop on a typical bill."
How much less you'll likely pay for energy from 1 July according to final price cap predictions
Households on direct debit energy bills are likely to pay around 18% less for gas and electricity from 1 July, according to final price cap predictions shared today by MoneySavingExpert.com founder Martin Lewis – see his full explanation below.
The assessment period for the July price cap ended yesterday. Cornwall Insight’s final prediction is a drop of 18% (so every £100 cost now will be £82 from July) compared to the rates people pay today under the Energy Price Guarantee. I can't see it being more than a couple of percent out compared to Thursday’s announcement. The regulator has already confirmed to me that prices will drop in July, so we know that or the first time since last September people the government will no longer be subsidising energy prices.
"The further out you go the more difficult things are to predict, it’s a bit of crystal ball gazing. Cornwall’s forecast continues to show prices dropping again in October, before rising slightly in January.
"If the predictions do turn out to be true, it does mean rates for the winter coming will be lower than for the winter gone. However when you factor in there's no longer the £66/mth winter support, it means lower users will still in practice pay more than last winter, higher users less.
"And of course prices are far in excess of what they were before the 'energy crisis' for many people over double."
| July-September 2023 | October-December 2023 | January-March 2024 |
|---|---|---|---|
Electricity | £1,048 | £1,060 | £1,085 |
Gas | £1,005 | £915 | £960 |
Dual-fuel | £2,054 | £1,976 | £2,045 |
| July-September 2023 | October-December 2023 | January-March 2024 |
|---|---|---|---|
Electricity | Unit rate: 29.48p/kWh Standing charge: 53p/day | Unit rate: 29.8p/kWh Standing charge: 54p/day | Unit rate: 30.65p/kWh Standing charge: 54p/day |
Gas | Unit rate: 7.49p/kWh Standing charge: 29p/day | Unit rate: 6.7p/kWh Standing charge: 30p/day | Unit rate: 7.08p/kWh Standing charge: 30p/day |
Will there be any further support for households from July?
From July, the state will no longer be subsidising all home energy bills via the Energy Price Guarantee, due to the Price Cap falling below it. This means it's spending many billions less than it expected to. So on Sunday's BBC One Kuenssberg show, Martin quizzed Environmental Secretary Thérèse Coffey on whether there is any further support for lower to middle income households planned(spoiler, it's unlikely).
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