Households face energy bill relief as price cap drops by 7%
- Ofgem has announced a 7% decrease in the energy price cap effective July 1, 2025.
- The average household energy bill will drop by £129, totaling £1,720 annually.
- Households should submit meter readings to benefit from these changes and avoid estimated bills.
In England, Wales, and Scotland, households prepared for a significant change in their energy bills as the regulator Ofgem announced a 7% decrease in the energy price cap. This reduction, effective from July 1, 2025, translates to an annual saving of £129 for the typical household, bringing the average bill down to £1,720. This adjustment follows the energy crisis that saw peak prices at the start of 2023, where the government's energy price guarantee was implemented to buffer households from soaring costs. The new price cap represents a 28% drop from the highest rates seen earlier this year. Nevertheless, prices remain approximately 10% higher than the same period last year, keeping the financial burden on many households. It is important to note that the price cap does not determine total household bills, as individual consumption still plays a crucial role in overall costs. Currently, around 22 million households are still linked to the price cap, while 35% of domestic customers have opted for fixed tariff deals that are not subject to these fluctuations. With changes kicking in, households are being encouraged to submit their meter readings by the end of the month to ensure accurate billing and to avoid estimated charges based on prior consumption rates. Research indicates that nearly 20% of households without smart meters have not submitted readings in the last three months, which raises concerns about potential higher bills come the new pricing timeline. In anticipation of future price changes, industry experts advise households to consider switching to fixed deals that could provide savings against the new price cap. Presently, there are numerous fixed tariff options available—10 of which are reported to be cheaper than the current price cap, with savings ranging around £145 for the average household. Amidst global energy cost uncertainties, many households are being prompted to explore competitive rates and secure lower costs before predicted price hikes occur later this autumn.