Energy bills are dropping by £122 a year from July - but Martin Lewis says Brits can't celebrate for too long as bills are set to rise again in winter.
Ofgem's price cap for those paying direct debit will drop by 7% to an average of £1,568 from July - down from the current £1,690. The average household paying by prepayment meter for dual fuel will pay £1,522 over a year, while someone paying on receipt of bill will pay £1,668.
The new price cap will come into effect on July 1 and will last until September 30. The Money Saving Expert (MSE) website founder Martin Lewis shared that whilst it was good news - there was also bad and ugly.
In a post on X, formerly Twitter, Martin said that for every £100 you pay now, from July until September you will pay less at £93. This may not sound like a lot but will be a blessing for millions of Brits across the country who are struggling to keep on top of their energy bills.
Martin noted that the "bad" was that standing chargers will remain high and in this announcement were "virtually unchanged" compared to Ofgem's April to July figure.
The standing charge is a mandatory payment on energy bills, and it is paid no matter how much gas and electricity a household uses. It is used to pay for things such as the upkeep of the energy grids and the amount varies depending on where you live in the UK. He added: "So higher users will see a proportionately bigger cut than lower users, for direct debit from July..."
Martin shared that the standing charge for electricity would now sit at 60.12p a day, which is up from 60.1p before. The standing charge for gas will be 5.48p down from 6.04p before. Martin added that the standing charge consultation launched by Ofgem last year would be published by the summer adding: "whenever that is".
Finally, Martin said the "ugly" was that the energy analysts at Cornwall Insight has predicted that "bg rises" were coming. He ex; pained: "Cornwall Insight has put out its new predictions and they don't make easy reading. If they're right this is the last fall, and the coming rises are big. On 1 Oct it's predicted to rise 12%, so you'll go back up and be paying £104 for every £100. Then on 1 Jan the crystal ball is saying it'll stay flat (at £104)."
Martin says that these predictions makes the "cheapest" fixes - which are currently 9% cheaper than now" - look like a "decent bet".
Energy unit rates from July 1
- Electric unit rate - 22.36p/kwH - down 9% from 24.5p
- Electric standing charge - 60.12p/day - from 60.1p
- Gas unit rate - 5.48p/kwH - down 9% from 6.04p
- Gas standing charge - 31.41p - from 31.43p