UK Energy Price Cap to Fall by £129, Offering Relief to Households Starting July 1

Starting July 1, UK energy bills will drop by £129 for millions of households, as Ofgem reduces the price cap. This welcome change will apply to all customers on standard variable tariffs, including those on dual-fuel plans. With the cost of living soaring, the move promises much-needed financial relief for families across the UK.

Published on
Read : 2 min
UK energy price change july 1
UK energy price change july 1. credit : shutterstock | en.Econostrum.info - United Kingdom

From 1 July 2025, UK households will experience a reduction in their energy bills, as Ofgem lowers the energy price cap by £129 annually. This adjustment comes at a time when many are grappling with rising living costs, offering significant relief to consumers. 

The reduction, which applies to those on standard variable tariffs and prepayment meters, aims to shield households from market volatility while providing a much-needed financial cushion.

A Vital Adjustment Amid Rising Living Costs

The reduction in the energy price cap comes at a critical time. With inflation affecting everyday expenses, the £129 saving is a welcomed cushion for many families across the UK. As of 1 July 2025, customers paying by Direct Debit will automatically see their annual energy bills drop from £1,849 to £1,720, according to the UK’s energy regulator, Ofgem.

The change will be applied across all major suppliers, including British Gas, Octopus, OVO, E.On, and EDF. Ofgem’s price cap is designed to protect consumers from volatile market conditions by setting a maximum rate that energy companies can charge for electricity and gas. The new cap will apply until 30 September 2025. 

While the cap will not directly impact those on fixed-term energy deals, it will benefit households on default tariffs, such as standard variable tariffs, and those who pay by prepayment meters.

Immediate Impact for Dual-Fuel Households

For dual-fuel customers—those who use both gas and electricity—the £129 saving will take effect automatically. In addition to the overall price cap reduction, unit rates and standing charges for both gas and electricity will decrease, making energy consumption more affordable. 

Electricity unit rates will fall from 27.03p to 25.73p, and gas unit rates will decrease from 6.99p to 6.33p. These changes should help ease the financial burden on households that rely on gas and electricity for everyday use.

However, Ofgem has urged households without smart meters to submit their meter readings promptly to ensure that billing accurately reflects the new, lower rates. 

This is especially important as failure to submit accurate readings could lead to inflated bills based on estimated usage. While it is not mandatory to submit readings on 1 July, energy companies have advised customers to do so within a few days to avoid discrepancies.

The energy price cap serves as an important safeguard for consumers, protecting them from unexpected hikes in energy prices due to shifts in the market. 

Leave a comment

Share to...