'Typical' energy use has fallen – don't mistake it for significantly cheaper prices

Regulator Ofgem has changed its calculations on how much energy a 'typical' household uses. This means the headline annual costs for the new Price Cap from 1 October and other energy tariffs may seem a little cheaper than they have been recently. But don't be fooled, prices won't be falling as much as it may seem.

'Typical use' is essentially a certain level of electricity and gas use that the energy regulator says a typical household will get through in a year. This 'typical use' figure is handy for us, and the rest of the energy industry, as it lets us put an average yearly price on the Cap and on each tariff, so we can easily compare.

Every few years, Ofgem looks at this figure – to make sure it reflects changing patterns of gas and electricity use across the UK – and this time round, it's decided we're all using slightly less gas and electricity. This means, from October, the headline prices you see will look like they've dropped more than they actually have. 

But always bear in mind that energy usage varies massively, and your annual cost will always be different from the headline figures you'll see quoted for the Price Cap and other deals, as what you pay depends on how much you use and where you live (as prices vary by region).

What is typical use?

It's a certain amount of kilowatt hours (kWh), the unit used to measure gas and electricity, which Ofgem has calculated to represent what a typical home uses.

It covers low, medium and high users, across standard credit, prepayment and Economy 7 meters.

For the most part, sites like ours will only use medium usage for people with standard gas and electric credit meters.

How is it changing?

For medium, typical usage – what we use to compare energy prices – Ofgem now thinks the typical household uses 11,500 kWh of gas over a year (down from 12,000 kWh) and 2,700 kWh of electricity over a year (down from 2,900 kWh).

No firm's gas or electricity unit rates or standing charges will change because of this typical use figure. It's only average, typical-use prices that will be different – the headline figures you'll see quoted in the media.

However, the Price Cap dropped on 1 October, so all those on standard tariffs (everyone not on a fix) will see bills fall.

If we use the new typical use figures, the Price Cap from October fell by 7% to £1,834 a year on average, down from the previous level of £1,976 a year.

But if we use the previous typical use figures, as Ofgem did when it announced the October Price Cap level on 25 August, the Price Cap from October is £1,923 a year, down 7% from £2,074 a year.

However, this is only a measure we use to compare between tariffs – what you actually pay will always depend on your specific usage, the region you live in and the way you pay for your energy.

If you're one of the millions on the Price Cap, there are now tariffs that are worth considering – see our Should you fix? guide for a full list of fixes, or Stick, switch or fix your energy tariff for a full rundown of your options.