Annual power expenses predicted to fall by way of £129 in July

Domestic power costs are forecast to fall in July, the primary drop in regulator Ofgem’s value cap for a 12 months.

The invoice of a family the usage of a standard quantity of fuel and electrical energy will fall by way of £129 a 12 months, a drop of just about 7%, analysts on the consultancy Cornwall Insight have predicted.

The fall would imply a standard annual invoice for a dual-fuel buyer paying by way of direct debit would price £1,720, down from the present degree of £1,849.

The value cap is in keeping with the price of every unit of power, no longer the whole invoice – so if you happen to use extra, you pay extra.

The power value cap covers round 22 million families in England, Wales and Scotland and is about each 3 months by way of Ofgem.

The cap adjustments each 3 months and the regulator illustrates the impact of this with the yearly invoice for a family the usage of a standard quantity of fuel and electrical energy.

This standard family is thought to make use of 11,500 kWh of fuel and 2,700 kWh of electrical energy a 12 months with a unmarried invoice for fuel and electrical energy, settled by way of direct debit.

The cap does no longer practice in Northern Ireland, which has its personal power marketplace.

“The fall in the price cap is a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs,” stated Dr Craig Lowrey, most important advisor at Cornwall Insight.

He added that, whilst it was once “a step in the right direction”, costs weren’t falling sufficient for the ones families nonetheless suffering with price of dwelling, and expenses “remain well above the levels seen at the start of the decade”.

“As such, there remains a risk that energy will remain unaffordable for many,” he stated.

Abigail Ward, coverage supervisor on the Energy Saving Trust, which promotes power potency, welcomed the forecast of inexpensive expenses.

However she added that “households will still be paying £100 more a year on their energy bills than last summer, proving that we’re still feeling the impacts of fluctuating international wholesale energy markets”.

“This is why we urgently need to see policy action from the UK government to reduce energy bills by upgrading homes at scale.”

Andy Manning, head of power coverage at Citizens Advice, stated the drop “might ease the burden of high bills for some households”, however added that “it’ll be cold comfort for those pushed to the brink by the legacy of the energy crisis”.

“Energy use and bills typically go down during the summer months, but the government can’t get complacent,” he stated, calling for extra reinforce for the ones suffering with power expenses.

Citizen Advice analysis from February 2025 displays that 6.7 million folks in Great Britain reside in a family in debt to their power provider, with over 8.3 million families discovering it tough to have enough money their power expenses.

Last month, Cornwall Insight had predicted a bigger fall within the cap – to £1,683 – and it stated the brand new forecast in part mirrored upper wholesale power costs.

It predicted the power value cap would fall once more in October, adopted by way of some other drop in January 2026.

However, it warned those forecasts might be suffering from quite a few components, together with converting climate patterns, US price lists, and the ongoing have an effect on of the battle in Ukraine.