The energy price cap will fall by 7% in July – should you fix a tariff?

The energy regulator, Ofgem, has today announced that energy bills for those on price-capped tariffs will fall by 7% on 1 July. Bills for a home using a typical, medium amount of energy will now be around £143 a month, or £1,720 a year. 

Daily electricity standing charges are decreasing from 53.8p to 51.37p, while daily gas standing prices will decrease from 32.67p to 29.82p. 

The price cap is not on your total bill but on each unit (kWh) of gas and electricity you use. Households that use more than the average amount of gas and electricity will end up paying more than the estimates. 

The current price cap for April-June 2025 sees a home using a typical, medium amount of gas and electricity pay around £1,849 a year if they pay by direct debit on a variable tariff. The changes will see that figure fall to £1,720. That equates to a decrease of about £129 a year, or £11 a month.

The price cap doesn't apply to you if you have signed up for a fixed energy deal. 

Today's update means the next few months could be a good time to fix into a tariff. When we last checked on 21 May 2025, we found five deals that would save the typical, medium-use household more than £95 a year for the three months from 1 July. The cheapest would save £203 a year from July. 

Energy companies could also start to release cheaper offers as they adjust to the new rates in the coming weeks.

See our table of the latest cheapest energy deals in our guide to how to get the best energy deal.

Use our free, independent energy comparison service to compare gas and electricity prices and find the best provider for you

What will my energy cost in July 2025?

The new average rates for variable tariffs for those who pay by direct debit will be:

• Electricity unit rate: 25.73p per kWh (currently an average 27.03p).
• Electricity daily standing charge: 51.37p per day (currently an average 53.80p).
• Gas unit rate: 6.33p per kWh (currently an average 6.99p).
• Gas daily standing charge: 29.82p per day (currently an average 32.67p).

If you have a prepayment meter, you pay the same standing charge as direct debit customers but slightly lower rates per kilowatt hour. 

At the new rates, a typical household with medium energy use paying by monthly direct debit can expect to pay around £143 per month for gas and electricity used between July and September. The same ‘typical’ household currently pays £154 per month. 

Ofgem sets the price cap and defines medium energy use as 11,500kWh of gas and 2,700kWh of electricity per year.

You'll pay a different amount if you use more or less than this medium. Below, we've compared the annual energy costs of example households using low, medium and high amounts of energy, paying current rates and the rates that begin on 1 July 2025.

The actual prices you pay for your energy will vary by region and by how you pay. Different suppliers may split out their unit rates and standing charges differently.

Your energy supplier should contact you to let you know your new prices before it starts changing them.

The price cap doesn't apply if you live in Northern Ireland.

If you have a prepayment meter, your unit rates will be slightly lower than those who pay by direct debit, though your standing charges will be the same.

Should I fix my energy prices?

As of April 2025,  Ofgem estimates that 65% of customers were on price-capped variable tariffs; 35% were on fixed contracts. Those with fixed deals won’t be affected by changes to the price cap. 

When we last checked on 21 May 2025, we found a choice of 31 tariffs that will cost less than the price cap that applies from April-June 2025 as well as the price cap that applies from July-September 2025. Early predictions are that the October price cap for the autumn months will stay around a similar level.

That means you'll save money by switching tariffs if you're currently paying variable rates. However, you may prefer to wait a couple of weeks to see whether energy companies start lowering prices more as they adjust to the new July price caps.

Read more on the latest predictions for the future of the energy market in 2025

Bear in mind that predictions can change. Should energy prices decrease while you're fixed into a deal, and you find yourself wanting to leave your contract early, some fixed deals will charge you hefty exit fees to drop out.

Before you switch, compare your monthly payments on a fixed deal with those you'd expect to pay on the price-capped tariff, and make sure you're not agreeing to exit fees that would stop you being able to leave should things change.

If you fixed a tariff earlier in the year at rates higher than those currently available, you can switch early to take advantage of the lower prices if your contract has no exit fees. If it does have fees but they are fairly low, you may want to weigh up whether it's still worth switching and paying the fee to take advantage of lower rates.

Compare gas and electricity prices today: use our free, independent energy comparison service to find the best provider for you

What if you can't afford your energy bills?

If you're struggling to afford your energy bills, there are several resources available to help you. 

Reaching out to your supplier is the best way to get set up with some help. Under Ofgem’s rules, suppliers must offer payment plans you can afford, and you can also ask for ‘emergency credit’ if you use a prepay meter and can’t top up. Some of the ways suppliers can help you include giving you more time to pay, offering you a payment break or reduction in your payments, and helping you access hardship funds. 

In addition to support from suppliers, there are government schemes designed to help those in need.

If you're not sure what you might be eligible for, head to our guide to getting help if you're struggling to pay your energy bill