Energy bills 'set to fall' this summer in major boost for millions of homes

Energy bills could be set to fall by £129 on average from this summer, according to latest predictions. The energy price cap is currently set at for the typical household paying by direct debit.

The latest forecast from analysts at Cornwall Insight say this could fall by around 7% to £1,720 from July - however, this is still far higher than what The exact amount you pay for energy depends on how much gas and electricity you use.

The Ofgem price cap does not put a limit on how much you can pay for energy - instead, it sets a maximum unit price for unit rates of gas and electricity, plus standing charges.

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The energy price cap covers around 22 million households in England, Wales and and is updated every three months. Cornwall Insight expects "a modest drop" in the price cap this October, followed by another in January 2026.

However, it says a range of factors could shift these forecasts, including changing weather patterns, the relaxation of EU gas storage rules, US tariffs and the continuing war in .

Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said: “The fall in the price cap is a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs.

“It’s a step in the right direction, but it should be taken in context. Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade.

“As such, there remains a risk that energy will remain unaffordable for many. The fall is also a clear reminder of just how volatile the energy market remains.

“If prices can go down, they can bounce back up, especially with the unsettled global economic and political landscape we are experiencing.“

The headline Ofgem price cap figures represent what the average billpayer can expect to pay, based on how much energy Ofgem estimates that the average household uses.

Ofgem says the typical home uses 2,700 kwh of electricity and 11,500 kWh of gas over 12 months. There are other factors to take into account.

There are different rates for prepayment customers, plus those who pay on receipt of bill. Unit rate prices vary by region, so your location can also effect your bill, and there are different rates for prepayment customers and those who pay on receipt of bill.

Confusingly, the energy price cap figure represents a yearly bill, but it is updated every three months so Ofgem can reflect changing wholesale costs.