Household energy bills predicted to fall by nearly £300 a year

Energy bills will fall in April by nearly £300 a year for a household using a typical amount of gas and electricity, a leading forecaster says.

Consultancy Cornwall Insight has predicted a 15% drop, taking the typical annual bill to £1,635 - the lowest in more than two years.

The energy price cap for the three months from April will be announced by regulator Ofgem in one week's time.

Many billpayers are still struggling to make payments.

If the prediction proves to be correct, the annual bill for a household, paying by direct debit, would fall by £293 a year compared with the current level of £1,928.

Ofgem's price cap, which will be announced next Friday, affects 29 million households in England, Wales and Scotland. Rules are different in Northern Ireland.

The regulator sets the maximum amount that suppliers can charge for each unit of gas and electricity but not the total bill, so if you use more, you will pay more.

Cornwall Insight's prediction is slightly more positive for billpayers than previous forecasts.

It said a relatively warm winter and less disruption than feared from disruption in the Red Sea had kept wholesale prices, paid by suppliers, at a lower level.

The forecaster said it expected a further fall in bills in July, to about £1,465 a year, followed by a slight rise to £1,524 in October. However, these predictions could change significantly as a result of global events.

"Forecasts show energy bills returning to their lowest levels in over two years, providing a much-needed respite for a nation struggling with a cost of living crisis," said Craig Lowrey, principal consultant at Cornwall Insight.

"Fairly healthy gas supply across the Atlantic, coupled with high storage levels in Europe, are helping to keep bills down. But we mustn't get too complacent. Our energy system is still walking a tightrope, and we cannot be sure another political or economic crisis won't send bills straight back up."

He pointed out though that even with the drop, prices will remain a struggle for many.

Consumers owe an estimated £2.9bn to energy suppliers. Ofgem is proposing lifting the cap by £16 between April and March next year to cover some of these bad debts.

Read more here