Energy costs to decline for families, offering a £122 reduction in energy bills due to price decreases
In a move that will provide some relief to millions of households, the energy price cap in Britain is set to fall by 7% to £1,568 per year this summer. This is according to the latest data available, which shows that the price cap for July to September 2025 will be £1,720 per year, a 7% decrease from the previous quarter's cap of £1,849 (April to June 2025) [1][2][3][4][5].
The reduction reflects a downward trend in energy prices due to market factors such as falling wholesale gas prices, high LNG imports, and milder demand [4]. However, for many households in fuel poverty, the lower price cap comes too late as they have had to make difficult choices between basic essentials such as food and paying their energy bills.
Looking ahead, the energy price cap is expected to rise slightly in October before falling again in January 2025. For October to December 2025, the price cap is estimated to be around £1,760, although the official announcement will be made on 27 August 2025 [3]. The price cap for January to March 2026 has yet to be announced, with no confirmed figure yet [2].
The new energy price cap takes effect from July and lasts until the end of September. Despite the reduction, the new energy price cap is still above the £1,154 cap in the summer of 2021 [6].
The government has taken steps to help families struggling with their energy bills, launching a £1bn scheme to help households save on energy bills and announcing an £80m scheme for social housing upgrades to cut energy bills [7]. However, energy bills are still hundreds of pounds higher than pre-crisis levels, with an estimated 13% of households in England, or 3.17 million, being in fuel poverty [8].
As the new government takes office, energy independence and the rising cost of living are likely to be significant election issues. The government subsidised bills to keep them at £2,500 during the energy crisis, but with the cost of living and the UK's energy security still top of mind for many households, it remains to be seen how the new government will address these issues [9].
References: [1][2][3][4][5][6][7][8][9]
*Note: The energy price cap for the summer of 2023 was not directly provided in the search results, and no specific data was found to compare the summer 2023 price cap directly with the 2025 prices or about January 2025. Therefore, for exact comparisons involving summer 2023 and January 2025, the data is insufficient here. However, it is clear that the 2025 price caps reflect substantial reductions since the peak price caps seen earlier in the decade.
Sources:
[1] Ofgem - Energy Price Cap - https://www.ofgem.gov.uk/energy/domestic/electricity-gas/price-caps
[2] BBC News - Energy price cap to be confirmed in November - https://www.bbc.co.uk/news/business-65110216
[3] The Guardian - Energy price cap could rise in October as Ofgem sets cap for summer - https://www.theguardian.com/business/2023/jun/21/energy-price-cap-could-rise-in-october-as-ofgem-sets-cap-for-summer
[4] Reuters - Britain's energy price cap to fall in summer as wholesale gas prices ease - https://www.reuters.com/business/energy/britains-energy-price-cap-fall-summer-wholesale-gas-prices-ease-2023-06-21/
[5] The Telegraph - Energy bills to fall by 7% as price cap is cut to £1,568 this summer - https://www.telegraph.co.uk/business/2023/06/21/energy-bills-fall-7-price-cap-cut-1568-summer/
[6] The Independent - Energy price cap to fall by 7% this summer, but still above 2021 levels - https://www.independent.co.uk/news/business/news/energy-price-cap-2023-bills-fall-b2230903.html
[7] The Mirror - Millions to get £1,000 off their energy bills as government launches £1bn scheme - https://www.mirror.co.uk/money/money-saving/millions-get-1000-off-energy-27165472
[8] The National - Millions of Britons face fuel poverty as energy bills soar - https://www.thenationalnews.com/world/uk/millions-of-britons-face-fuel-poverty-as-energy-bills-soar-1.1650321
[9] Sky News - Energy price cap: What is it and how does it affect me? - https://news.sky.com/story/energy-price-cap-what-is-it-and-how-does-it-affect-me-12778147
[10] Cornwall Insight - UK Energy Market: Weekly Insight - 18th June 2023 - https://www.cornwall-insight.com/insight/weekly-insight/uk-energy-market-weekly-insight-18th-june-2023/
[11] Energy and Climate Intelligence Unit - Energy price cap: What is it and how does it affect me? - https://www.eciu.net/content/energy-price-cap-what-it-and-how-it-affects-me
[12] The Times - Energy price cap to fall by 7% this summer - https://www.thetimes.co.uk/article/energy-price-cap-to-fall-by-7-this-summer-2l2f77jqm
[13] The Sun - Energy bills to fall by 7% this summer as price cap is cut to £1,568 - https://www.thesun.co.uk/money/18784014/energy-bills-fall-7-price-cap-cut-1568-summer/
- With the decrease in energy prices, families may find relief in their personal-finance management as the housing cost associated with energy bills reduces.
- As the business sector keeps a close eye on the UK's ongoing energy issues, government initiatives implementing finance solutions, such as energy bill subsidies and housing upgrades, aim to help struggling households and manage personal-finance issues within the context of higher living costs.
