With the cost of living unfortunately continually dominating the thoughts of most people across the UK, it’s not surprising that many of us are questioning (and hoping) if energy bills will go down in 2024. In this article, we are going to explore the current state of the energy crisis and use these, and the opinions of experts, to estimate whether or not energy bills are likely to go down in 2024. Here’s hoping!
Why are energy bills so high?
The UK has been experiencing a ‘Cost of Living Crisis’ since 2021. The cost of living crisis refers to a period in which the cost of everyday essentials such as food, fuel and bills increase quicker than the average household income. This results in people having less expendable income than they previously have had.Â
This cost of living crisis has hit the UK particularly hard for a number of reasons. For example, ongoing impacts from the pandemic caused demand to increase, and the war between Ukraine and Russia threatened supplies, which drove up the price of gas and electricity even more. More recently, the conflict in Gaza also increased prices.
Will bills go down in 2024?
Getting to the question we’re all dying to know the answer to: will energy prices fall this year? The Ofgem price cap (the maximum amount that companies are allowed to charge for each unit of energy) changes every three months and is mainly impacted by the wholesale cost of energy. Unfortunately, on 1st January 2024, the energy price cap increased by 5% – Happy New Year!Â
This means that, for the average household, the energy price cap will be set at £1,928 between January and March 2024, compared to £1,834 from October to December 2023.
However, it’s not all doom and gloom (hooray!). In fact, analysts are predicting that the price cap will fall twice this year, starting with a whopping 14% drop in April. This predicted drop is significantly more than originally expected.
| Time period | Price cap on new typical use figures |
| Old cap: 1 October 2023 to 31 December 2023 | £1,834 a year |
| Current cap: 1 January 2024 to 31 March 2024 | Increase of 5% – £1,928 a year |
| 1 April 2024 to 30 June 2024 | Predicted fall of 14% – £1,660 a year |
| 1 July 2024 to 30 September 2024 | Predicted fall of 4% – £1,590 a year |
| 1 October 2024 to 31 December 2024 | Predicted increase of 3% – £1,640 a year |
Why are energy prices predicted to fall so much more than first expected?
The reason that our energy prices are expected to fall 14% from April is because of the decline in wholesale energy prices. These were initially predicted to be higher due to the Israel-Hamas war, however the material impact on energy supplies has been significantly lower than expected.
Additionally, due to the rise in global temperatures, much of Europe has experienced a relatively mild winter so far, and so the remaining levels of gas are above initial expectations for this time of year.
However, it is important to note that these are only predictions, and events such as the ongoing conflict in Gaza and the disruption to shipping in the Red Sea could still cause prices to rise throughout the year.
Should I change energy tariffs?
With the worry of prices continuing to rise and the return of fixed tariffs, many people are rushing to switch to fix their energy bills. However, because the energy price cap only applies to standard variable tariffs, if it were to fall as predicted, you could risk paying more in the long run through fixing your tariff, rather than sticking with a variable one.
The main benefit of a fixed tariff over a variable one is the increased certainty over the amount your bill will be each month, meaning you can budget accordingly. However, you are often charged a premium for this privilege, and your bills won’t be impacted by any price drops (or increases) throughout your contract term.
You also need to bear in mind your standing charge and exit fee (if you’re midway through your term).
Can I get help with energy bills?
Regardless of the predicted decrease in April this year, energy bills are still high, and so a lot of households in the UK will still be struggling to pay them.
Depending on individual circumstances, you might be able to request help from your energy supplier. They may be able to provide some help, including:
- More time to pay
- Payment breaks or reductions
- Access to hardship funds
Hardship funds are aimed at households that are struggling to pay their gas and electricity bills. They can include help such as monetary grants that don’t have to be repaid, or certain amounts of debt being written off. It is important to check with your energy supplier to see whether these funds are available, and what the eligibility criteria includes.
You might also be eligible for government help, such as the Warm Home Discount, Winter Fuel Payments or Cold Weather Payments. It’s worth checking with your local council to see if you are able to access these schemes.
If you aren’t eligible for help from your supplier or the government, the biggest way of reducing your energy bills is by reducing your energy usage. Read our article on things you can do to reduce your energy usage and lessen your bills here.
How GreenSmart can help
At GreenSmart, we offer a range of different services that can reduce your energy consumption, such as boiler services, boiler replacements and underfloor heating installation. Contact us today to learn how we can help you keep the cost of your bills lower.
