What will the energy cap changes mean for my bills?

What will the energy cap changes mean for my bills?Image source, Getty ImagesPublished6 August 2021Updated Just nowTypical annual energy bills rose by £221 to £1,862 from 1 July, under regulator Ofgem's latest energy price cap.The 13% increase in the cap affects millions of people in England, Scotland and Wales, and reflects higher wholesale oil and gas costs caused by the US-Israel war with Iran.What is the energy cap and how is it changing?The energy cap fixes the maximum amount which customers on standard variable tariffs can be charged for each unit of gas and electricity used.It covers around 33 million households in England, Wales and Scotland and is set by the regulator Ofgem every three months, external.Of the 33 million: around 19 million pay by direct debitaround 7 million pay by standard credit (they pay when they get a bill)around 6 million have prepayment metersThe typical annual usage figure applies to the first category: dual-fuel households on a standard variable tariff which pay by direct debit. Between 1 July and 30 September, their gas prices will be capped at 7.33 pence per kilowatt hour (kWh), up from 5.74p. Electricity prices will be capped at 26.11p per kWh, up from 24.67p.It means that a typical household will pay £1,862, up from £1,641 between 1 April and 30 June. But customers' actual bills depend on the amount of energy used and how they pay for it.The typical annual bill for customers who pay by standard credit will be £2,005, up 13% from £1,772.The typical annual bill for prepayment customers will be £1,812, up 13% from £1,597.Ofgem regulates the energy market in England, Scotland and Wales. Northern Ireland has a separate system.What is a typical household?Although the price cap sets the unit prices for gas and electricity, your household's actual bill depends on the overall amount of energy you use, and how you pay for it.Where you live, the type of property you have, how energy efficient it is, how many people live ther...