Domestic gas and electricity prices have dropped, but costs will rise again in October.

Ofgem's new price cap for England, Wales and Scotland has reduced a typical household's annual energy bill by £122, bringing it down to £1,568-the lowest in two years. However, forecasts predict a rise to £1,723 in October, a £155 (10%) increase.

The price cap, adjusted quarterly, limits the maximum price per unit of gas and electricity, not the total bill. Larger properties generally pay more due to higher energy usage, while smaller properties pay less. The cap affects 28 million households, excluding those in Northern Ireland, where the sector is regulated differently.

For July to September, gas prices are capped at 5.48p per kilowatt hour (kWh) and electricity at 22.36p per kWh. A typical household uses 2,700 kWh of electricity and 11,500 kWh of gas annually. Prepayment meter users pay slightly less, with an average bill of £1,522, while those paying quarterly by cash or cheque face higher costs, averaging £1,668.

Standing charges remain unchanged at 60p per day for electricity and 31p per day for gas, varying by region.

Households have accrued about £3 billion in collective debt to suppliers due to previously high prices. Those on prepayment meters, who usually top up during colder months and often face greater financial pressure, will see less immediate benefit from the summer price drop.

Most households pay by direct debit, spreading payments over the year, and should have been notified by their supplier about the price changes. Experts recommend taking a meter reading now to ensure accurate billing.

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