According to a forecast by consultancy firm Cornwall Insight, domestic energy prices in the UK are expected to decrease by 16% in April, providing some relief to consumers. The prediction suggests that the average annual household bill for typical gas and electricity usage could drop from £1,928 to £1,620. Despite enduring two years of high prices, there is a possibility of a further reduction in the summer. However, bills are still expected to remain higher than pre-crisis levels.
The forecast is subject to change as Ofgem, the regulator, will set its price cap for Q2 in a month’s time. Cornwall Insight’s principal consultant, Craig Lowrey, stated that if the current stability in the wholesale market continues due to healthy energy stocks and a positive supply outlook, energy costs could reach their lowest since the Russian invasion of Ukraine.
Under Ofgem’s price cap, the annual bill for a typical household in England, Wales, and Scotland stands at £1,928. However, higher usage will result in higher costs as the price cap applies to each unit of energy, not the total bill. Currently, the price of gas is 7p per kWh and electricity is 29p per kWh.
If Cornwall Insight’s forecast is accurate, the annual bill for typical usage could fall to £1,620 in April, a 16% decrease. The firm also predicts a further drop to £1,497 a year in July before a slight increase to £1,541 a year in October.
Uncertainty remains over wholesale oil prices due to disruptions in the Red Sea and regional tensions. However, these factors have not yet impacted prices. The supply of liquefied natural gas from the US and low prices in the Asian market have helped keep prices down.
Energy prices have significantly contributed to the UK’s high inflation rate, leading to increased interest rates and borrowing costs. Many households, especially those in vulnerable situations, have struggled to pay bills despite government financial support. Customers owe nearly £3bn to suppliers.
The regulator proposes adding £16 to a typical household bill from April 2025 to March 2025 to allow suppliers to offer prepayment plans and write off debts. Energy prices and the sector’s regulation differ in Northern Ireland, where households generally pay less than the UK average, but businesses pay more.
If you’re struggling to afford your energy bill, consider checking your direct debit, paying what you can, and claiming all the benefits you’re entitled to.
