Price Cap Cut Offers Relief to Households
Millions of UK households will benefit from a £129 drop in annual energy bills beginning Tuesday, 1 July 2025. The savings will apply to customers on standard variable tariffs, covering providers such as British Gas, Octopus, OVO, E.On, and EDF. Ofgem announced the energy price cap will fall by 7% from £1,849 to £1,720. The new rate will apply between 1 July and 30 September 2025 for households paying by Direct Debit.
Ofgem stated: “Between 1 July and 30 September 2025, the energy price cap is set at £1,720 per year for a typical household who use electricity and gas and pay by Direct Debit. This is a decrease of 7% compared to the cap set between 1 April to 30 June 2025 (£1,849). The price cap also makes sure that prices for people on a standard variable tariff (default tariff) are fair and that they reflect the cost of energy.”
Energy bills set to drop, starting 1st July
Dual-Fuel Customers to See Immediate Benefit
Customers using both gas and electricity on a dual-fuel plan will experience the £129 annual saving automatically. The change applies to all standard variable tariffs across major suppliers in the UK.
From Tuesday, unit rates and standing charges will also decrease. Electricity unit rates will drop from 27.03p to 25.73p. The electricity standing charge will reduce from 53.80p per day to 51.37p. Gas unit rates will move from 6.99p to 6.33p. The daily standing charge for gas will decrease from 32.67p to 29.82p.
All Households on Default Tariffs Covered
Households paying by Direct Debit, prepayment meter, standard credit or Economy 7 will be covered by the new cap. People not on fixed deals will see the change automatically from 12:01am on Tuesday, 1 July 2025.
The energy price cap aims to protect customers from unfair pricing during volatile market conditions. It reflects the average energy consumption of a typical household.
Higher Use Means Higher Savings
The £129 saving applies to average usage, but higher consumption could increase both total costs and savings. A household using double the average energy could pay £3,440 but save £258.
Urgent Meter Reading Reminder for Accuracy
Households without smart meters have been urged to submit meter readings before the change. This ensures billing reflects the new, lower rates. Submitting accurate readings avoids charges at the old, higher rates for energy used after 1 July.
Suppliers rely on estimated usage if customers fail to submit readings. That could lead to incorrect and possibly inflated bills.
Although customers should take readings on or near 1 July, immediate submission is not mandatory. Many suppliers allow a grace period of several days to submit readings. Some firms may accept backdated readings up to a week later.
Ofgem Recommends Submitting Readings on Time
Ofgem stressed the importance of timely submissions to avoid overcharging. Incorrectly claiming energy usage on Tuesday when it occurred on Monday is fraudulent. Households have been advised to avoid submitting false readings.
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Energy Firms Prepare for Tariff Adjustments
British Gas, Octopus, OVO, E.On and EDF have adjusted systems to reflect the updated cap. Households will see changes on billing statements issued after 1 July. The impact will vary based on usage patterns and billing cycles.
Ongoing Role of the Price Cap in Market Stability
The energy price cap continues to serve as a tool to ensure fair pricing. It protects households from market price spikes and encourages supplier accountability. Ofgem reviews the cap quarterly to align with wholesale market trends and operating costs.
Clear Communication and Support for Consumers
Suppliers and the regulator have communicated the changes through official statements and public advisories. Customers have access to guidance on billing, usage tracking and submission windows.
Reduced Rates Offer Timely Support
The July 1 change arrives during a period of increased focus on uk household affordability. Lower energy costs provide financial relief for households managing rising living expenses.
The update reflects efforts to uk align consumer prices uk with current market conditions. It also uk highlights the importance of regular meter readings for accurate billing.
Households are advised to remain uk aware of future quarterly changes and track energy usage closely. The next update from Ofgem is expected in September for the October-December period.
