Millions of households will receive an extra £122 in their bank accounts

Households will get a major boost after it was confirmed that energy bills will fall again from July. The energy price cap will be reduced again from £1,690 to £1,568.

It means an average annual saving of £122 for households and follows a further reduction in the price cap at the start of this year. The news will come as a relief to many families who have faced astronomical energy bills over the past two years.

Finally, there are signs that taxes are returning somewhere to normal levels. It will depend on how customers pay their bills in terms of how soon they will feel the benefit of the savings.

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Those who pay by direct debit may not see their payments changed for a while, but the energy savings will see them get credit to their accounts. Experts say the bills are still too high and have warned they could climb back up before the end of the year.

Alastair Douglas, CEO of TotallyMoney, said: “Any drop in the energy price cap is a good thing. And the news that it is falling by £122 over 12 months will be welcomed by the millions of households struggling to keep up. But it is worrying – and in some ways confusing – that prices remain considerably higher than before the crisis and are expected to rise again before the end of the year.

“And with just six suppliers now dominating 70% of the market, there is not enough competition. Before the crisis, more than 50 energy companies were vying for new customers, with a number of bids undercutting the ceiling.

“However, we are seeing some deals re-entering the market and you could save money. But what’s important is to do the math first and read the fine print. The energy price cap is based on estimates, so your usage may be different, and if you try to leave early, you may incur early exit charges that can cost up to £300.

“When it was introduced, smart meter technology was meant to work for people, not against them. However, 10% of meters are faulty and, with energy firms slow to act, millions of households are at risk of unwittingly racking up hundreds of pounds in bills – through no fault of their own.”