How much will bills cost with the new energy price cap?

The maximum amount you can be charged for your energy unit by suppliers is set to change. How much more will your bills cost?

Details of the new energy price cap have been announced, and millions of people will now see a decrease in the cost of gas and electric bills.

The new cap from Ofgem will come into effect from July 2025.

A typical household’s annual bills will fall by 7%, bringing the average annual bill for a typical dual-fuel household paying by Direct Debit down to £1,720. This is a decrease of £129 from the previous cap of £1,849 set between April and June 2025. 

Energy price cap

The energy price cap tells suppliers the maximum prices they can charge customers for energy on a Standard Variable Tariff for suppliers in England, Wales and Scotland.

This is for the standing charge (what you pay for a daily rate) and the unit of energy (kWh) you use.

The energy price cap doesn’t affect you if you are on a fixed deal.

Who benefits from the price cap?

If you’re paying for your energy through standard credit, Direct Debit, a prepayment meter, or an Economy 7 meter, you’re covered by this cap.

However, your actual savings will depend on your household’s energy usage, where you live, and the type of meter you have.

Energy Price Cap rates for July – September 2025

These rates are for a “typical” household on a standard variable tariff that uses electricity and gas and pays by Direct Debit.

If you don’t use much energy at the moment, your bills will likely remain the same.

• Electricity rates
  Those on a standard variable tariff paying by Direct Debit will see electricity at:
  • Unit rate: 25.73p per kilowatt-hour (kWh)
  • Standing charge: 51.37p per day
• Gas rates
  Gas will be charged at:
  • Unit rate: 6.33p per kWh
  • Standing charge: 29.82p per day

These rates include VAT and are based on the average across England, Scotland, and Wales.

The rates are different, depending on where you live and what type of meter you have.

The next review of the energy price cap, covering the period from 1 October to 31 December 2025, is scheduled to be published by 27 August 2025.

Will my bills fall or rise under the price cap?

Although the prices are capped, there is no limit to the amount you’ll pay.

It’s the unit rate and standing charge rate that are capped.

The more energy you use, the higher your bill.

Your final bill can also be impacted by where you live in the country, how you pay, and what type of energy meter you use.

And, these are the default tariffs.

Suppliers may offer cheaper rates, so it could be time to switch.

You need to balance out if you think the rates may go back up again towards the winter months, which predictions look like they may rise again in October.

How can I save on energy costs?

Just because the overall price is coming down, saving money is all about reducing consumption.

We’ve found tonnes of ideas to save money on energy bills.

You may also be eligible for the Warm Home Discount. This will give you £150 in credit on your bill.

What do you do if you cannot afford your energy bill?

Firstly, please don’t panic.

There has been a lot of talk about choosing between heating and eating, but it doesn’t need to come to that.

Don’t try and hide from the situation as it will make things worse.

Get in touch with your supplier and let them know you are struggling.

It could be you are eligible for the Priority Service Register. Again speak to your energy provider (plus your water bill) to see if you can be added.

Ask your energy provider for more time to pay your bill and set up a payment plan.

You could also ask if they have any hardship funds to help pay off energy debts.

It is worth checking if you can apply for the Household Support Fund, which is a grant managed by your council to help with energy costs and more.