Last Updated: 04/06/2025
As we enter July 2025, Ofgem has confirmed a moderate reduction in the energy price cap to £1,720, down from the previous level of £1,849 set for April to June. This decrease reflects easing wholesale energy prices, though bills remain significantly higher than pre-crisis levels.
The updated price cap for the period 1 July to 30 September 2025 is as follows:
Electricity: Unit rate of 25.73p per kWh, with a daily standing charge of 51.37p
Gas: Unit rate of 6.33p per kWh, with a daily standing charge of 29.82p
This quarterly adjustment follows Ofgem’s ongoing strategy to ensure energy prices remain aligned with market conditions. The next scheduled price cap updates are:
27 August 2025 – for the period 1 October to 31 December 2025
25 November 2025 – for the period 1 January to 31 March 2026
While this drop offers some relief to the 29 million households affected by the cap, energy costs are still significantly influenced by global supply issues and seasonal demand. Households are encouraged to review fixed tariff options to help protect against potential winter price spikes. You can explore our latest comparison of the best fixed energy deals.
“With the energy price cap falling slightly from 1st July 2025, now is a smart time for customers still on a Standard Variable tariff to review their options. Fixed deals can offer price certainty and protection ahead of the colder months. If you don’t switch, you could still be paying nearly £200 more a year on average than you need to.."
- Scott Byrom, Chief Executive Officer
The 'Energy Price Cap' is a legal requirement that energy suppliers must comply with in an attempt by Ofgem, the energy regulator, to protect households against unfair rises in gas and electricity costs and being overcharged for their home gas and electricity. The cap puts a limit in place on what suppliers can charge customers who are on either standard variable or default energy tariffs.
It is these tariffs that around 29 million of the UK remain on and are, in any normal time, amongst the most expensive forms of energy tariff with savings now available of around £160 below the new price cap level.
Price caps work by setting a limit on the rates a supplier can charge for each unit of gas and electricity. Many households are stuck on expensive default tariffs that they have fallen into after a fixed rate energy deal has expired, when they move in to a new property or if they have never switched their gas and electricity provider. With the cap in place, suppliers can only charge up to a set amount for their default energy tariffs, therefore apparently (as Ofgem claims) saving households money on their energy bills.
Your tariff details are on your energy bill. You can see if you are on a "Standard Variable" tariff or, if you switched to an energy supplier after another supplier went bust, a "Deemed Contract." If you are on a fixed-rate energy tariff, the cap will not apply to you until your energy tariff expires.
Even with the cap in place, this doesn't mean you won't end up paying more for your energy each year. Price caps are set at a unit price (the amount you pay for each kilowatt hour used) plus standing charges (the amount charged each day whether you use energy or not). With the cap being set by averaging out annual energy usage, if you use more energy than the medium Typical Domestic Consumption Values (TDCVs) - meaning "the average household", you will still be charged extra. Equally, if you use less, then your annual energy bill will be lower.
Price caps are also based on your region due to transportation costs and you could see higher rates if you don't pay by direct debit.
Usually, with the cap in place for standard variable or default tariffs, the best way to make big savings to your energy bills is to switch to a cheaper, more often "fixed", energy tariff. This could be with your existing energy supplier or moving to a new one altogether. As the price cap doesn't protect you from price fluctuations, it's generally best to consider a fixed rate plan to lock in your energy costs for a set period of time, e.g. 12-24 months.
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