Did You Know? Your "Typical" Energy Bill Just Shrank (Your Real One Didn't)
Ofgem's October price cap for a typical home is £1,723. Last October's was £1,755. So bills are down, right?
Not quite. In July, Ofgem changed what "typical" means. It now assumes households use 7% less electricity and 17% less gas than before. Smaller assumed usage, smaller headline bill. Your meter hasn't heard the news.
On the old assumptions, this October's cap would be £1,935. Against last October's £1,755, that's roughly £180 (10%) more, not £32 less. Ofgem itself says that, adjusted for inflation, the cap is 7% above a year ago.
Then there's the VAT cut on electricity, widely quoted as a £45 saving. Ofgem says that without it the figure "would have been around £45 higher", though its wording doesn't say which figure. Either way it only touches electricity. Gas bills rise 8%, so gas-heated homes feel it most, while homes without gas see under 1%. Channel 4's FactCheck, using a July forecast, found the average home still paying about £49 more than a year earlier.
Is the new "typical" wrong? Possibly not, as plenty of homes do use less. But a lower assumption can flatter a headline, so check your own meter readings before cheering.
Why it matters: every "saving" depends on its baseline. The best question in energy is simply: compared to what?
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