Ofgem Announce an Energy Price Cap Decrease Starting in July

Every 3 months, Ofgem announce a new price cap on energy prices, and thankfully, the latest announcement comes with some good news. The price of energy that households will pay from July to 30th September will decrease by 7% if you pay via Direct Debit. This reduces the typical UK household energy bill by £11 a month, or £129 per year.

This will come as welcome news to many people across the UK, although the prices are still 10% higher (around £152) than they were the same time last year, but are 28% lower (£660) than the price cap at the start of the energy crisis, which started in 2023. MoneySavingExpert founder, Martin Lewis, had this to say on the new price cap announcement, "Today's announcement that the Price Cap is to fall by 7% is welcome, but nothing to shout home about. All this really does is reverse April's rise, so it's back to roughly the cost at the start of the year. Crucially, energy bills this July will still be 10% higher than at the same time last year."

Households are encouraged to shop for better deals and use comparison sites, as even though the overall prices are down, you may find a better deal with another company. Director General of Markets at Ofgem says, "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."

When comparing energy prices, it may be worth looking into fixed rates as you'll be locked in with a lower price, and if the price cap rises again after September, you'll be protected.