Energy Price Cap drop to £1720 - Still £150 more than 2024

Leader Live

18 hours ago

The typical household bill for those who have still not signed up to a fixed tariff will drop by £129 to £1,720 per year when the regulator's new price cap – which sets the limit on how much firms can charge customers per unit of energy – comes into force.
This is £660 (28%) lower than at the height of the energy crisis at the start of 2023 when the government implemented the energy price guarantee.
However, prices remain elevated with the upcoming level £152 (10%) higher than the same period last year.
The price cap does not limit total bills because householders still pay for the amount of energy they consume.
While around 35% of domestic customers are now signed up to a fixed deal that they have actively sought out – and which is not governed by the price cap – approximately 22 million households in England, Wales, and Scotland are still on the energy price cap.
Martin Lewis is urging those still on the cap to shop around for a better deal: "The Energy Price Cap for July is to drop by 7%, yet it's still a Pants Cap, get off it if possible."
The Energy Price Cap for July is to drop by 7%, yet it's still a Pants Cap, get off it if possible. Video briefing on what it means in practice, and what you should do… pic.twitter.com/NQ9FNXy8uR
It is these households that should read their meter by the end of the month to make sure they benefit fully from lower energy prices from July 1.
Failing to do so leaves the risk of paying the higher pre-July 1 rate for energy used in the form of estimated bills.
Research for the comparison site Uswitch suggests that a fifth of households (20%) without smart meters have not submitted their meter readings in the last three months, and 6% have not done so for a whole year.
Uswitch calculated that homes on a standard price cap tariff with average usage are expected to spend £63 on energy in July compared with £113 in June, due to a combination of cheaper unit rates and lower usage over the summer.
It urged households to sign up to a fixed deal while prices remain competitive, and said there were 10 fixed deals available which were cheaper than the July price cap – the cheapest offering savings of around £145 for the average household.
However, average energy bills will continue to be 10% higher (almost £150) than this time last year. They are hundreds and hundreds of pounds a year more than before the energy bills crisis (65% more).
Simon Francis, coordinator of the End Fuel Poverty Coalition says: 'From 1 July, millions will be looking for cheaper energy deals, but too many will be locked out of the best tariffs due to broken or missing smart meters. This is creating a two-tier energy system that punishes households already struggling.
'Energy bills remain hundreds of pounds a year more than before the energy bills crisis. This is in part caused by structural problems in the UK's energy pricing system caused by the cost of electricity remaining closely linked to volatile global gas markets.
'Not only is this reliance on gas costing us money, but the geological reality is that the North Sea basin is dying and there are limited levels of gas for home heating left, the UK is simply running out of gas. This is also becoming a national security issue as Britain's dependence on foreign gas deepens.'
I'm not lying. I'm just someone who knows what he's talking about, rather than an idiot relying on AI answers. Wholesale costs are less than half of total bills. Source: https://t.co/yABjw4aWJF pic.twitter.com/VQ22N61Dxl
Uswitch energy spokesman Ben Gallizzi is reminding customers to take a meter reading before the changes: 'Customers who don't have a smart meter should submit their readings before or on Tuesday 1 July, so their supplier has an updated – and accurate – view of their account.
'There's a lot of uncertainty about global energy costs at the moment, which has led industry experts to predict a rise in energy bills and in the price cap this autumn.
'But households can get ahead of this possible price hike by fixing at cheaper rates now. Currently, there are a range of fixed deals currently available that are around £145 cheaper than the July price cap for the average household.
'If you can switch to a deal cheaper than the July price cap, now is a good time to make the change. We urge customers to run an energy comparison as soon as possible.'
Recommended reading:
Martin Lewis shares 'crucial need to know' energy bill rules
Ofgem has also reminded households that they do not have to pay the price cap, saying 'there are better deals out there'.
The fall in energy costs will come as a relief for households, who suffered through an 'awful April' of bill rises, including Ofgem's last 6.4% price cap increase.
Under-pressure households have also been hit with the biggest increase to water bills since at least February 1988, alongside steep rises across bills for council tax, mobile and broadband tariffs, as well as road tax.