More than 15 million households will see their energy bills fall from October as a result of the energy price cap being lowered.

The cap will be set at £1,042, the lowest level since the cap was introduced in January 2019, generating savings of around £84 for UK customers.

Ofgem also lowered the cap for prepayment meters by £95, from £1,164 to £1,070 a year.

The energy regulator said the reduction was due to a sharp decrease in wholesale gas costs as a result of the pandemic. But it warned the cap is likely to rise again in April 2021 as wholesale prices have started to recover.

Jonathan Brearley, Chief Executive of Ofgem, said:

“Millions of households, many of whom face financial hardship due to the Covid-19 crisis, will see big savings on their energy bills this winter when the level of the cap is reduced.

 

They can also reduce their energy bills further by shopping around for a better deal. Ofgem will continue to protect customers in the difficult months ahead as we work with industry and government to build a greener, fairer energy market.”