Ofgem has today announced that the energy price cap for July 2025 will be set at £1,720 per year for average usage households paying by Direct Debit.
This is a significant drop of 7% and will be welcome news for customers on standard variable tariffs who are affected by the price cap rising and falling.
Richard Neudegg, director of regulation at Uswitch.com, said: “A 7% fall in the price cap from July will reduce the average annual bill by £129 for the millions of customers still sitting on a standard tariff - a welcome break in the clouds in time for summer.
“But the savings from fixed deals are far bigger than this drop. The cheapest fixed deal could save the average household £203* a year compared with the July price cap.
“Millions of homes are already paying cheaper rates than the new July cap, after switching to a fixed deal.
“There are plenty of fixed deals still available that beat both the current and July energy rates. So for households still sitting on a standard tariff linked to the price cap, now is a great moment to lock in fixed savings before the winter gloom returns.”
What will the average energy unit rates be from July?
The average unit rates and standing charges for the July price cap will be:
| Electricity | Gas | |
|---|---|---|
| Unit rates | 25.73p per kWh | 6.33p per kWh |
| Standing charge | 51.37p per day | 29.82p per day |
What can customers affected by the price cap do about it?
Although this is a large drop, the fact remains that there are much bigger savings available if customers switch to fixed tariffs.
Not only can customers save more than they would under the price cap, but they can save now, rather than having to wait until July.
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What will happen to the next price cap?
At the moment, prices are due to increase slightly in the autumn, but this isn’t a guarantee. The wholesale market remains unpredictable and it’s difficult to be sure whether prices will rise or fall.
