Energy bills set to sharply drop saving Britons ‘£500 a year’

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Energy bills may fall sharply by the summer, new analysis has shown, in good news for Britons. A steep drop would save families the equivalent of £500 a year, according to Investec.

The energy crisis has been looming over the UK for the past year, with the impacts of recovery from COVID-19 and the Russian invasion of Ukraine coinciding.

It has meant a staggering rise in the wholesale price of gas for the suppliers purchasing gas and electricity.

Subsequently, this cost has been passed on to consumers, with Government intervention necessary to cushion the blow.

However, new analysis suggests both the energy tariff and the average annual bill will come down in the current months.

It is estimated bills will drop from the current price cap figure of £2,500 a year, to less than £2,000.

Such a reduction would represent a 20 percent drop in bills, providing welcome relief for struggling families.

However, even at £2,000, energy bills will still be at a record high.

It would mean they are approximately double the level they were in summer 2021, representing an increased burden for Britons.

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Martin Young, analyst at Investec, acknowledged this, and said: “This latest reduction is welcome.

“But it does not disguise that these estimates are still considerably higher than historic levels, and challenging for many.”

Mr Young has predicted a typical household is likely to pay £1,981 a year from July.

The expert also estimates a further drop will take place in October, bringing bills slightly further down to £1,966 a year.

The Government has recently intervened to provide help with the high cost of energy bills.

Last week, Chancellor Jeremy Hunt cancelled a planned rise in the energy price cap from £2,500 to £3,000 from April 1.

The decision was due to a drop in wholesale prices, as well as pressure from industry experts.

For example, the founder of MoneySavingExpert, Martin Lewis, wrote an open letter to Mr Hunt on the matter, backed by 21 charities and consumer organisations.

Mr Hunt told the Commons: “After listening to representations from Martin Lewis and other experts, I today confirm the Energy Price Guarantee will remain at £2,500 for the next three months.

“This means the £2,500 cap for the typical household will remain in place when energy prices remain high, ahead of an expected fall in prices from July.

“This measure will save the average family a further £160 on top of the energy support measures already announced.”

Some four million households on prepayment meters will also have their charges brought in line with comparable direct debit charges.

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