top of page
  • Emily Baker

Energy Prices in the UK Set to Drop by 12% from April 2024

phone with the latest energy bill

Every quarter, the UK energy regulator reviews and establishes a cap on how much energy suppliers can charge for each unit of energy. As we approach the period from April 1 to June 30, 2024, significant changes are on the horizon, impacting households across England, Scotland, and Wales. This article breaks down the key modifications to the energy price cap, payment methods, and additional measures introduced to support consumers.

Energy Price Cap Review – April to June 2024

Beginning April 1, 2024, the energy price cap for a typical household using electricity and gas and paying by Direct Debit will decrease to £1,690 per year. This marks a noteworthy £238 annual reduction compared to the cap set from January 1 to March 31, 2024, which stood at £1,928.

Covered Payment Methods

Consumers paying for electricity and gas through standard credit, Direct Debit, prepayment meter, or Economy 7 (E7) meter are covered by the energy price cap. The actual amount paid depends on factors such as energy consumption, location, and the type of meter in use.

Energy Price Cap Rates – April to June 2024

Electricity Rates:

  • Standard Variable Tariff users paying by Direct Debit will be charged an average of 24.50 pence per kilowatt-hour (kWh).

  • The daily standing charge for electricity is set at 60.10 pence per day.

Gas Rates:

  • Standard Variable Tariff users paying by Direct Debit will incur an average charge of 6.04 pence per kilowatt-hour (kWh).

  • The daily standard charge for gas stands at 31.43 pence per day.

Support for Prepayment Meter Users

To balance standing charges between prepayment and Direct Debit methods, changes have been implemented to eliminate the 'PPM premium.' Previously covered by government support through the Energy Price Guarantee, this support will conclude on April 1, 2024. While prepayment meter users will save approximately £49 per year, Direct Debit payers will incur an additional £10 per year.

Covering Debt Costs

A one-off extra payment of £28 per year has been introduced to ensure suppliers have adequate funds to support struggling customers. This will be applied to bills of those paying by Direct Debit or standing credit, offsetting the end of an £11 annual allowance related to COVID pandemic debt costs.

Lewis expresses excitement over Ofgem's decision to end the 'Market Stabilisation Charge' regime from April 1, which had hindered competitive switching deals. However, he notes that the ban on 'acquisition only' tariffs for another year may limit the stimulation of competition in the market. Lewis encourages Ofgem to promote competition further to drive down prices.

As the energy landscape undergoes these changes, consumers are urged to stay informed about the evolving regulations and how they impact their energy bills. The adjustments to standing charges, payment methods, and additional support measures signify a concerted effort to create a fair and sustainable energy pricing structure for households across the UK.



bottom of page