What is the energy price cap and how might it affect you?
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In 2022, we saw the cost of energy increase for millions of households across the UK.
This is how much each house pays for gas and electricity - used to heat and light our homes, provide hot water and power things like the oven, fridge or TV.
A price cap is when energy companies are told the top amount they can charge for selling their energy. Price caps set by the energy regulator, Ofgem, and apply in England, Scotland and Wales.
Ofgem has now dropped its energy price cap so companies now have to charge less for their energy.
However experts aren't sure households will feel like they have any more money in their pockets.
Energy prices rose sharply in 2022, partly fuelled by the war in Ukraine which affected supplies.
The new prices took effect on 1 October, and many households have been struggling to pay the higher bills.
Other changes like inflation have also been affecting the cost of living - meaning lots of everyday things are becoming more and more expensive.
What is the energy price cap?
Ofgem regulate the electricity and gas markets in Great Britain, but not Northern Ireland
The prices energy companies charge for electricity and gas is set by the regulator.
There are regulators for lots of things (including schools), the regulator for energy companies is Ofgem or The Office for Gas and Electrical Markets.
What is Ofgem? Well, it sets the maximum price energy suppliers in England, Wales and Scotland can charge households for each unit of gas or electricity. This is called the energy price cap.
The price cap limits how much suppliers can charge for each unit - it is not a cap or limit on the total cost of the energy bill.
What does the energy price cap mean?
The price cap in October 2022 meant energy companies could charge households a higher price for the energy they used from October which meant household bills rose.
In Northern Ireland energy companies can announce prices rise when they need to but it is still looked at by a regulator. Because of this there is no way of knowing when the next price rise will be.
The price cap is changed every three months and it's been announced that the energy price cap will drop in July 2023.
But there is now no Government support for struggling households like there was over the winter, meaning many experts don't think many people will feel the benefit.
Why is the price of fuel going up?
There are several reasons why wholesale gas prices jumped up in cost.
It's partly due to an increase in demand on the existing supplies and uncertainty after the war in Ukraine affected gas supplies from Russia.
At the time, the boss of the energy watchdog Ofgem says the price of energy had reached record levels due to Russia's invasion of Ukraine and it "has no choice, but to reflect these cost increases in the price cap".
Demand - this means how many people want to buy something and how much they want to buy it. The higher the demand the more the price charged will rise, unless the supply increases.
Supply - this means how much of a certain product is available to buy. The lower the supply the higher the price charged will go, unless the demand for it decreases.
When will energy bills go down?
Ofgem has now dropped its energy price cap for the second time in a row, with the first coming into place from April 1 2023.
This new 17% reduction - which will come into place on July 1 - means the cap will fall from 拢3,280 to 拢2,074.
At its peak, the energy price cap stood at 拢4,279.
Ofgem says it'll mean millions of families will see their bills drop by more than 拢400 a year - the first time energy bills have dropped in two years.
Don't leave things on stand-by, it might only look like there's a little light on, but not switching stuff off properly wastes a lot of power.
Unplug chargers when not in use: Chargers for things like mobile phones and MP3 players use power when they're plugged in - even if they're not charging something.
Turn off lights when you leave the room. Some people think if you turn lights on and off, it uses more power than leaving them on. This isn't true.
Let us know what things you do at home to save energy!
But experts are worried that without government help, there will still be households struggling to pay their bills.
From October 2022, all UK households were given a one-off 拢400 discount on their fuel bills from October.
拢650 was also paid to more than eight million low-income households who receive benefits or tax credits.
When did government help with energy bills end?
Jeremy Hunt is the chancellor of the exchequer
The Energy Bills Support Scheme, which saw UK households given a one-off 拢400 discount on their fuel bills started in October 2022 and ended in April 2023.
People in low-income households who receive benefits are still eligible for some support schemes from the government such as Cost of Living Payments, Winter Fuel Payments.
Vulnerable families can also claim help through the Household Support Fund, the Warm Home Discount scheme, and hardship funds run by energy companies.
Chancellor of the Exchequer, Jeremy Hunt, hasn't ruled out further support for struggling families.
In an interview with Sky News he said the government is "willing to do what it takes" to support households in the autumn if energy bills rise again.
It's expected there will be a slight increase in bills in Northern Ireland because the energy market is separate to the rest of the UK.
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