London Daily

Focus on the big picture.
Thursday, Jul 31, 2025

Ofgem energy price cap falls - but average household bills still expected to rise

Ofgem energy price cap falls - but average household bills still expected to rise

Implementing a social tariff, which offers lower energy prices for vulnerable customers, should be urgently examined, Ofgem said - as it warned prices are unlikely to fall to pre-energy crisis levels.
The energy regulator has reduced the cap on the amount energy companies can charge customers but bills are still expected to increase.

Ofgem has today announced the cap on the amount typical households pay on electricity and gas bills will drop to £3,280 from 1 April.

It's a decrease from the previous cap of £4,279 effective from the beginning of January to the end of March and reflects the fall in wholesale energy prices.

The price cap sets a maximum amount suppliers can charge per unit of energy and is regularly reviewed by Ofgem.

The amount is not the maximum that can be charged - customers using a lot of energy will have higher bills - but instead reflects typical usage levels.

Households had been protected from the previous high price cap due to the government's energy price guarantee (EPG) which capped the energy unit price resulting in an average household bill of £2,500.

But bills are now likely to rise as the EPG threshold will increase to £3,000 for an average household from 1 April. Even with the £500 reduction in the price cap, the scheme will cost an estimated £26.8bn.

As a result, the average home can likely expect bills to rise by an estimated 20%, an increase of £500 a year, according to energy consultancy Cornwall Insights as households absorb the gap between Ofgem's price cap and the EPG.

Prices are to rise even further when the end of the £400 energy rebate scheme is factored in, Dr Craig Lowrey, the principal consultant at Cornwall Insight, said.

"Regrettably the forecast for April looks set to leave the price cap above the increased energy price guarantee level.

"While tumbling cap projections are a positive, unfortunately, already stretched households will be seeing little benefit before July."

Under the rebate scheme, six instalments of about £66 were paid monthly to bill payers from October.

Commenting on the high bills, the Ofgem chief executive said, a social tariff which offers lower energy prices for vulnerable customers should be urgently examined.

"A very tough time for many households across Britain"

"Where people are struggling, we urge them to contact their supplier to make sure they are getting all the help and support they are entitled to," Jonathan Brearley said.

"We also think that, with bills continuing to be so high, there is a case for examining with urgency the feasibility of a social tariff for customers in the most vulnerable situations."

There is some good news ahead, Mr Brearley suggested, but prices are still not going to fall to the levels seen in the last 18 months.

"Today's announcement reflects the fundamental shift in the cost of wholesale energy for the first time since the gas crisis began, and while it won't make an immediate difference to consumers, it's a sign that some of the immense pressure we've seen in the energy markets over the last 18 months may be starting to ease," he said.

The pressure, however, will not be removed entirely.

"Prices are unlikely to fall back to the level we saw before the energy crisis," he said.

"Even with the extensive package of government support that is currently in place, this is a very tough time for many households across Britain."

Spending on the EPG will effectively be zero from July until the end of 2023 as Ofgem's energy price cap is expected to fall below the guarantee, according to Cornwall Insights.

Ofgem's July and October caps are forecast to be below £3,000. Such caps would mean there is no price difference in amounts charged by energy companies and what customers pay.
Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×