Energy bills are heading down this summer as Ofgem slashes the price cap by 7% for the July to September period.
The cut means the average dual fuel household will pay £1,720 a year – £129 less than the current cap. Standing charges for Direct Debit and prepay customers will also drop by around £19 a year.
Wholesale price falls are behind most of the drop, making up 90% of the fall, with further savings from lower supplier operating costs.
It’s a welcome shift for households still feeling the pinch. Although prices remain higher than a year ago, they’re now £660 (28%) below the peak in early 2023 when the government stepped in with emergency price guarantees.
Ofgem’s Director General of Markets, Tim Jarvis, said: “A fall in the price cap will be welcome news for consumers, and reflects a reduction in the international price of wholesale gas. However, we’re acutely aware that prices remain high, and some continue to struggle with the cost of energy.”
He urged customers to take control: “You don’t have to pay the price cap – there are better deals out there so it’s important to shop around.”
Around 35% of households are now on fixed deals, up from 15% a year ago when few tariffs were on offer. Some fixed tariffs are currently around £200 cheaper than the new cap level.
Ofgem has also completed its first full review of supplier operating costs since 2019. It found suppliers are now more efficient, and despite rising debt costs, overall operating costs have fallen – helping deliver this cut.
The regulator is now exploring further reforms to support those in energy debt and overhaul standing charge structures ahead of winter.
Copyright © 2025 Energy Live News LtdELN