The average annual energy bill is set to drop by £122 in July under the new Ofgem price cap.
According to the energy regulator, the price cap takes effect from July until the end of September.
The average annual bill will be£1,568 a year - a 7 per cent reduction.
The cap limits the maximum price that can be charged for each unit of gas and electricity - not the total bill, therefore using more energy, means households will pay more.
The average annual energy bill is set to drop to by £122 in July under the new Ofgem price capPAIt comes after a drop in wholesale gas prices.
Gas prices began to rise sharply in 2021 following Russia’s invasion of Ukraine in early 2022.
The latest reduction still leaves bills far higher than the £1,154 cap in the summer of 2021.
Bills will be around £500 less than the cap in July last year, when it topped £2,074.
Gareth Kloet, spokesperson for Go.Compare Energy said: "For many people in the UK, the news that the Price Cap will fall on July 1 will be welcomed. The unit rate for gas in particular has fallen 9% which could mean a sizeable saving for many billpayers.
LATEST DEVELOPMENTS:
"It is a pity that there hasn’t been a decrease in standing charges for bill payers, as that would have been another welcomed saving.
"While there isn’t a lot you can do to change these as these are set by the energy company, you can control how much energy you consume and it’s this usage that will help you save on your bills."
Energy bills peaked in 2023 when the cap reached £4,279, however, the Government provided funding to keep them at £2,500.
Simon Francis, coordinator of the End Fuel Poverty Coalition added: "Years of staggering energy bills have taken their toll and we now know the true cost of the crisis.
According to the energy regulator, the price cap - which limits what can be charged per unit of energy - takes effect from July until the end of September
GETTY"Customers are £2,500 out of pocket because of Britain’s broken energy system, people are turning to loan sharks to pay their energy bills, millions of people are living in cold damp homes and many are experiencing a mental health crisis driven by high bills.
"The next Government will need to act quickly after the election to end energy debt, protect households from the energy market, bring down bills for good, improve housing standards and make Britain a clean energy superpower."
According to an analysis by the consultancy Cornwall Insight, the price cap is expected to increase slightly in October before dropping again in January 2025.
