Starting July, UK energy bills fell by £129 as Ofgem lowered price caps by 7%
On the UK’s energy bill this summer, energy regulator OFGEM announced a 7 per cent lowering its price cap, reducing its average annual bill to £1,720 from July 1, and will receive some relief from energy costs this summer.
After selling for £129, it rose 6.4% in April, which raised the average annual bill to £1,849. The upcoming reduction reflects a significant drop in wholesale gasoline prices, ofgem said, accounting for 90% of the cuts, the rest due to changes in supplier operating costs.
The cap will limit the fees charged by the largest suppliers per unit of natural gas and electricity for customers in England, Wales and Scotland. It does not apply to Northern Ireland with its own energy market structure.
The decline in wholesale energy prices is a combination of geopolitical and seasonal factors, including mild spring weather, following President Trump’s recent tariff announcement.
However, Cornwall Insight analysts warn that despite possible further falls over the next two quarters, these situations remain unpredictable variables such as weather patterns, Russia’s war in Ukraine, and global trade tensions.
According to citizens' advice, despite lowering the price cap, the energy fee is still £152 higher than in July 2023 and 52% higher than pre-crisis levels. The charity estimates that nearly 7 million people in the UK lag behind their energy bills and re-called for the government to introduce targeted support and upgrades to household energy efficiency.
“The drop in energy prices will relieve the burden on some households, but the bills are still significantly higher than before the crisis,” said Citizen Advice CEO Dame Clare Moriarty.
“The government must provide more targeted bill support and invest in upgrading 5 million homes with energy-saving measures.”
Ofgem Marketing Director General Tim Jarvis welcomed the reduction, but admitted that many families continued to struggle.
“For consumers, the drop in price caps will be welcome news and reflects the decline in international prices for wholesale natural gas,” he said. “However, we are keenly aware that prices are still high.
“You don’t have to pay the price cap – a better deal is there. Go around, talk to your vendors, and consider switching to a direct debit or smart payment method, which could save up to £136 a year.”
As competitive transactions return to the market, 35% of households are now fixing tariffs, up from 15% last year, according to OFGEM. Consumer groups and price comparison services encourage families to compare tariffs and lockdowns when prices fall.
At record levels of energy debt, suppliers are urging the government to introduce “social tariffs” to protect the most vulnerable financial vulnerabilities. Jarvis confirmed that Ofgem is “doing all he can to support consumers”, including developing reforms to implement allegations and exploring new ways to help families trapped in debt.
“We are making more changes to help consumers this winter,” he said.
The energy price ceiling, which is launched in 2019, is reviewed quarterly and aims to protect consumers who periodically convert suppliers from the expenses of standard variable tariffs. Critics argue that while it avoids many people from price fraud, more targeted support for low-income families is urgently needed to address the long-term affordability crisis.
With energy prices showing tentative signs of tentative, governments and regulators are now under pressure to ensure support reaches the people in the most need and keep future energy markets unfavorable winters.
