Ofgem energy price cap falls by 7% – here’s how much your bills will now be

Energy bills will drop by around 7% in July, energy regulator Ofgem has announced.

A household using a typical amount of gas and electricity should see their bills fall by £129 a year.

It comes as government regulator Ofgem reduce their price cap – the amount a supplier can charge for each unit of energy – for the first time in a year.

The typical amount someone will pay per year is £660 (28%) lower than at the height of the energy crisis at the start of 2023.

However it is still 9% higher than the price cap set for the same three month period last year.

Ofgem said the cap, which is reviewed every three months has fallen because global wholesale prices for energy have gone down.

Changes to supplier business costs have also made an impact, it added.

The price cap, which is reviewed every three months, does not apply to Northern Ireland.

Tim Jarvis, director general of markets at Ofgem, said: ‘A fall in the price cap will be welcome news for consumers, and reflects a reduction in the international price of wholesale gas.

‘However, we’re acutely aware that prices remain high, and some continue to struggle with the cost of energy.

‘The first thing I want to remind people is that you don’t have to pay the price cap – there are better deals out there so it’s important to shop around, and talk to your existing supplier about the best deal they can offer you.

‘And changing your payment method to direct debit or smart pay as you go can save you up to £136.’

He added that in the longer term, the UK needs an energy system where prices are insulated from the volatile international gas market, ensuring more stable prices and energy security.

‘And we’re working closely with government to get the investment we need to reach our clean power and net zero targets as quickly as possible,’ he said.

‘We’re also doing everything we can to support consumers today and pushing ahead with more changes to help consumers. This includes working on ways to support those trapped in energy debt and bringing in reforms to standing charge tariffs for this winter.’

Citizens Advice chief executive Clare Moriarty said the drop would ease the burden of high bills for some households but urged the government not to lose perspective.

She added: ‘Bills will still be 52% higher than before the energy crisis and nearly seven million people live in households that have fallen behind on bills.

‘Today’s announcement will be cold comfort to the millions paying off a mountain of debt on top of their monthly costs.

‘The government has said it hopes to provide more support to pensioners this winter but we know that people with children are often struggling most of all with energy.

‘It must provide more targeted energy bill support to those hardest hit, and upgrade five million homes with money-saving energy efficiency measures.’

Meanwhile, Simon Francis, coordinator of the End Fuel Poverty Coalition said: ‘The government’s reverse ferret on Winter Fuel Payments are a clear sign that ministers know that people are struggling with energy bills – but sticking-plaster solutions and U-turns won’t help people in the long-term.

“While bills may fall slightly in July, they’re still significantly higher than before the energy crisis and remain tied to the unpredictable cost of fossil fuels. Without urgent reform and real investment, millions will continue to face unaffordable bills and cold homes.”

Here’s how much you will pay in England, Scotland and Wales, according to Ofgem.

Electricity rates

If you are on a standard variable tariff (default tariff) and pay for your electricity by direct Debit, you will pay on average 25.73p per kilowatt hour (kWh). The daily standing charge will be 51.37p per day. This is based on the average across England, Scotland and Wales and includes VAT. 

Gas rates

If you are on a standard variable tariff (default tariff) and pay for your gas by Direct Debit, you will pay on average 6.33 pence per kilowatt hour (kWh). The daily standing charge is 29.82 pence per day. This is based on the average across England, Scotland and Wales and includes VAT. 

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