July 2025 Price Cap
Ofgem recently announced that the price cap would decrease by 7% from the 1st July. The price cap is a national average that dictates the highest price that an energy supplier can charge to its customers. This price varies slightly by region and payment method.
The decrease is very welcome after the 6.4% increase that we saw in this quarter, which contributed to April 2025 being known as ‘Awful April’. Ofgem meet every three months to discuss the price cap for the next quarter. This new price cap will run from 1st July 2025 – 30thSeptember 2025.
This price cap decrease will see the average annual bill fall from £1849/year to £1720/year. Actual energy bills will vary depending on usage, but this gives an idea of how much someone could expect to save on the new rates.
Although this rate is higher than July 2024, experts are suggesting that we may not see huge price hikes for the rest of 2025. However, this is only a prediction and will likely change throughout the year.
In the Midlands, we will see the standing charge and unit rate for electricity drop across all payments methods, and almost all payment methods for gas (there will be a slight increase in the standing charge on gas for people who pay on receipt of bill).
Direct debit
People on direct debit will see their electric standing charge capped at 50.69p and their gas standing charge capped at 29.84p. This means that a household that has both gas and electric, will pay 80.53p per day from 1st July, which is over 5p less per day than the current price cap.
As well as this, the unit rate for electric will reduce by 1.34p (to 25.14p) and the gas unit rate by 0.65p (to 6.28p).
Pre-payment meter
People on pre-payment meter have their standing charge rates capped at the same amount as direct debit customers, so 50.69p on electric and 29.84pfor gas. This means that a household that has both gas and electric, will pay 80.53p per day from 1st July, which is over 5p less per day than the current price cap.
People on pre-payment meter, which still currently has the lowest unit rates, will see the cap for their electric unit rate drop by 1.29p (to 24.34p) and the gas unit rate drop by 0.66p (to 6.02p). Although the electric unit rate hasn’t reduced by as much as the rate for direct debit customers, the unit rate itself is still cheaper by 0.8p.
On receipt of bill
On receipt of bill, also known as standard credit, remains the most expensive method of payment. The standing charge has reduced to 58.51p for electricity and increased slightly to bring the gas standing charge to 37.7p per day. Overall, dual-fuel households will still be paying less per day, 96.22p instead of 96.46p on the current rate, but still a lot more than other payment methods.
The same can be said for the unit rate for customers paying on receipt of bill. The capped unit rate for electricity will reduce by 1.3p (to 26.55p) and the gas unit rate will reduce by 0.68p (to 6.62p). Although these reductions are inline with other payment methods, the electric unit rate is 1.41p more than for direct debit customers and over 2p more than customers on a pre-payment meter.
