Energy bills will fall by 7% in July - the first drop for a year, energy regulator Ofgem has announced.

It means a household using a typical amount of gas and electricity will see their annual bill fall by £129.

The regulator's price cap, which is set every three months, sets a maximum that suppliers can charge for each unit of energy, affecting 21 million households in England, Scotland and Wales.

Charities say cheaper bills are welcome but many people still struggle to pay, with millions of customers collectively owing about £4bn to suppliers, the BBC reported.

Customers can estimate their own potential saving in energy bills in July by knocking 7% off their monthly direct debit. On average that will be about £11 a month.

The cheaper bills will kick in at the warmest time of the year, when energy use is lower, but analysts expect little change in prices come October.

Tim Jarvis, director general of markets at Ofgem, said the drop in energy bills reflected a fall in the international price of wholesale gas.

He said: "We're acutely aware that prices remain high, and some continue to struggle with the cost of energy."

Households were hit by a series of bill hikes for energy, water and council tax at the start of April, which drove inflation to its highest for more than a year.