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Millions of households will see their energy bills fall from today as the new Ofgem price cap comes into effect.

The price cap has fallen by 7% but your bill is still dependent on how much gas and electricity you use. The average household paying by direct debit will see their yearly bill reduced from £1,849 to £1,720.

Analysts at energy consultancy Cornwall Insight have forecast a further drop of 1% to £1,698 a year from this October. If you have a prepayment meter, the average yearly bill is falling from £1,803 to £1,672 from today.

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The yearly charge for someone who pays on receipt of bill is going down from £1,969 to £1,855. But families are still paying far more for energy than they used to.

The price cap had increased three times before today - it went up by 10% in October, then by another 1.2% in January and finally by 6.4% in April.

If you pay by direct debit, you can use our calculator below to see how much your energy bill is falling by today.

The Ofgem price cap does not put a limit on how much you can pay for energy. It sets the maximum you can be charged for unit rates of gas and electricity, plus your standing charges, which are a fixed fee that you pay to be connected to the grid.

This means your bill can be higher or lower than the main price cap figure, which just represents what the average billpayer can expect to pay. Ofgem comes up with this figure based on how much energy it estimates the average household uses.

Ofgem says the typical home uses 2,700 kWh of electricity and 11,500 kWh of gas over 12 months. Your location can also affect your bill, as unit rates vary by region. There are also different rates for prepayment customers and those who pay on receipt of bill.

It is also worth keeping in mind that even though the price cap represents a yearly bill, it is actually updated every three months to take into account fluctuating wholesale energy prices. The price cap used to be updated only twice a year, so every six months.

The Ofgem price cap covers around 22 million households that are on a standard variable rate (SVR) tariff - so if you're not currently fixed into an energy deal.

This could be because you didn't fix into a new deal after your existing tariff expired, or you didn't fix into an energy deal after moving property. You can contact your current energy supplier to see what type of tariff you're on.