Many families in the UK are finally getting some relief from high living costs. Starting in July 2025, energy bills will go down by about 7%. This change is due to a new price cap set by Ofgem, the UK’s energy regulator.
On average, homes could save £129 per year, lowering their yearly energy bill from £1,849 to £1,720. This is great news for people who’ve been struggling with expensive utility bills.
What Is the Energy Price Cap?
The energy price cap is a rule from the UK Government to stop energy companies from charging unfair prices. It began in 2019 and sets a limit on the price per unit of energy (like electricity or gas) that companies can charge.
- It applies to homes in England, Scotland, and Wales.
- Your bill can still be high if you use a lot of energy.
- But thanks to this cap, you won’t be overcharged for each unit you use.
This cap helps protect people from huge price increases and keeps things fair.
Why Are Bills Going Down in July?
This drop is happening because Ofgem has lowered the energy price cap. The current cap is £1,849, but starting in July 2025, it will be £1,720.
- That’s a £129 saving per year for most homes.
- It’s the first drop after three price increases in a row.
- Experts at Cornwall Insight, a well-known energy group, say bills might go down again in October 2025 and January 2026.
What’s Causing the Drop in Energy Prices?
There are a few reasons for this good news:
- Gas and oil prices around the world have gone down.
- Tensions in global trade have eased, especially with the U.S., making things more stable.
- In April 2025, people faced a 6.4% increase in energy costs, plus higher prices for water, internet, and mobile services.
- Inflation also went up to 3.5%, compared to 2.6% in March.
So, this small price drop is a welcome relief after a tough few months.
How Often Does Ofgem Change the Cap?
Ofgem reviews the price cap every three months (four times a year). They decide the new rate based on:
- The wholesale price of energy (what energy companies pay before selling to homes)
- Market trends
- Global events
This makes sure that customers pay a fair price and that the cap changes with real-world conditions.
What Can You Do as a Consumer?
Even though the energy cap is helping, it’s still smart to:
- Use less energy when possible
- Check for government help or discounts
- Stay updated on changes from Ofgem
This way, you can keep your bills as low as possible.
Conclusion
From July 2025, many UK households will feel some relief as energy bills go down by around £129 per year, thanks to Ofgem’s new price cap. This change comes after a tough period of high inflation and rising costs for basic services. While this isn’t a complete fix for energy affordability, it’s a helpful step.
It shows that global energy markets and UK policies are slowly becoming more stable. Families should continue watching energy updates, use energy wisely, and take advantage of support options to save even more in the coming months.
FAQ’S
1. What is the new Ofgem energy price cap for July 2025?
It’s £1,720 per year for a typical household, down from £1,849.
2. How much can I save?
About £129 a year on average.
3. Why is the price going down?
Global gas prices have dropped, and trade tensions have eased.
4. Will prices fall again later?
Experts say small drops may happen again in October 2025 and January 2026.
5. Does the cap limit my total bill?
No. It only limits the price per unit. Your total bill depends on how much energy you use.