Here's everything you need to know about bills as the energy price cap changes today (1 July).
Back in May, homeowners were warned about the date they must take a meter reading before an energy price cap change to prevent their energy supplier from determining bill prices that aren't accurate to their typical usage.
That deadline has now arrived, and people are now left wondering how it will affect their bills moving forward.
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But what exactly is the energy price cap?
Well, as energy regulator Ofgem explain: "The energy price cap sets a maximum price that energy suppliers can charge consumers for each kilowatt hour (kWh) of energy they use. How much you pay depends on how much energy you use."
The cap is also described as a 'government protection' which is calculated by Ofgem.
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"At Ofgem we regulate energy suppliers, but we do not regulate the oil and gas production sector," the site continues. "The cap ensures that the profit energy suppliers make is capped."
Simply, the energy price cap is a limit on the price people pay for their energy, with the energy regulator announcing that 'typical' gas and electricity bills will be capped a £2,074 a year from 1 July.
The new cap will leave households currently struggling with the cost of living crisis with an annual saving of £426 by setting a limit on the maximum amount energy suppliers can charge for each unit of gas and electricity.
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It does not cap your total bill, however, which will change depending on how much energy you use.
Ofgem adds: "The way you pay for your energy, where you live, your meter type, as well as your consumption, will affect your energy bill."
The price per kilowatt hour for customers on the default tariff sees electricity at 30p per KWh with a daily standing charge of 53p and gas at 8p per KWh with a daily standing charge of 29p.
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But how will all this actually affect a household's bills?
Which? Energy Editor, Emily Seymour, explained: "The news that the energy price cap will come down to £2,074 a year for the typical household from July is positive, but many will understandably be confused about what exactly this means for them and their monthly outgoings.
"While the new price cap on variable tariff rates will see typical bills drop by around £500, energy bills will be almost double the amount they were before the energy crisis began and these prices will still be unaffordable for many households.
Seymour informed households 'struggling to pay higher bills' that 'there is help available'.
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She advised: "Speak to your energy provider about a payment plan you can afford and check to see if you qualify for any government schemes."
Back in winter of last year, households across the UK with a domestic electricity account received a non-repayable grant of £400 between October 2022 and March 2023.
The payment, split into six Government energy support vouchers each worth £66 or £67 expired yesterday (30 June).
However, Environment Minister Therese Coffey has stated there are no current plans for more energy bill subsidies.
Bills, roughly, are said to drop by around 17 per cent, although Money Saving Expert’s Martin Lewis has warned the British public will 'feel no real benefit' from the drop.
He explained: "It is worth remembering in April everybody lost the [£400] winter bill support so in practical terms, people aren’t going to be feeling any real benefit.
"They are going to be paying the same as they were over winter."
Topics: Money, UK News, Cost of Living
Rhiannon Ingle