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Monday, Sep 01, 2025

Energy bills predicted to fall from July by nearly £450

Energy bills predicted to fall from July by nearly £450

Energy bills for a typical household are expected to fall by nearly £450 from July, according to new forecasts.
Consultancy firm Cornwall Insight predicts bills could drop by as much as £446 under a new official price cap set to be announced by Ofgem on 25 May.

A typical user pays no more than £2,500 a year for their energy because of the Government's Energy Price Guarantee.

Analysts predict the new price cap will be set at £2,054 for July.

Then it is expected to fall further in October to £1,976.

Ofgem's current cap for an average household is £3,280, but consumers aren't directly affected by it because the government's guarantee scheme has a lower threshold. That will change in July when the cap falls and the threshold for the guarantee rises to £3,000.

The guarantee scheme is set to end entirely next March.

Government support is thought to have cost the taxpayer around £29.4bn in total.

Dr Craig Lowrey, principal consultant at Cornwall Insight, said the new cap was good news for households.

"Under these predictions, an average consumer would see bills drop by around £450 compared to the existing levels of the energy price guarantee, with bills currently predicted to stay relatively stable over the next nine months," he said.

The price of wholesale energy increased as Covid restrictions were eased and then rocketed after Russia's invasion of Ukraine last year.

In January Ofgem's price cap peaked at £4,279, and was predicted to hit £6,000 this year, potentially adding hundreds of pounds to monthly bills.

The government stepped in to limit bills, and also gave a £400 winter discount to every household, paid in six instalments between October and March.

British wholesale gas prices have fallen from a peak of 640p per year in August 2022, to around 70p per therm.

But Cornwall Insight warned that, while bills were falling, it did not expect them to return to pre-Covid levels "before the end of the decade at the earliest".

It added energy bills are still around £1,000 higher compared to what they were in 2021.

"Regrettably, it looks as if these prices may become the new normal," Dr Lowrey added.

Energy is regulated separately in Northern Ireland, where bills will be held at £1,950 per year for an average household.
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