Ofgem published the updated cap levels for charge restriction period 14b, covering 1 July to 30 September 2025, in a letter dated 23 May 20251. The Direct Debit cap for a typical dual fuel customer falls from £1,849 to £1,720, a decrease of £129 or 7% compared with the 1 April to 30 June 2025 level1. Energy UK, which announced the figure on 22 May, said the cap has not decreased since July 2024, when it fell to £1,5682.
The cap differs by payment method and meter type. Ofgem's figures, calculated at medium consumption of 2,700kWh of electricity and 11,500kWh of gas, are:
| Payment method | April to June 2025 | July to September 2025 | Change |
|---|---|---|---|
| Direct Debit | £1,849 | £1,720 | -£129 (-7%) |
| Standard credit | £1,969 | £1,855 | -£113 (-6%) |
| Prepayment (PPM) | £1,803 | £1,672 | -£130 (-7%) |
| Economy 7 (Direct Debit) | £1,201 | £1,145 | -£56 (-5%) |
Ofgem said customers paying by standard credit, by cash or cheque, will pay an additional £136 compared with those paying by Direct Debit, and that standard credit is the most expensive payment method under the cap1. The PPM cap will be £47 lower than the Direct Debit cap1. For electricity only customers on Economy 7 meters, the standard credit cap falls to £1,227, an additional £82 compared with Direct Debit, while the PPM cap falls to £1,115, which Ofgem says means those customers pay £30 less than by Direct Debit1.
Ofgem attributed the change mainly to wholesale costs, where the allowance fell by £106 (13%), from £841 to £7341. It said the decline was likely driven by global economic uncertainty following the US tariff announcement and the EU's proposal to ease gas storage requirements, and that prices remain elevated compared with last year, largely because EU gas storage was around 34% full at the end of winter 2024/251. Standing charges will reduce for most households by £19 (6%), with electricity standing charges down £9 (5%) and gas down £10 (9%)1. Uswitch reported average unit rates for the July cap of 25.73p per kWh for electricity and 6.33p per kWh for gas, with standing charges of 51.37p and 29.82p per day respectively3.
"The level of the Direct Debit price cap 3, for cap period 14b (1 July to 30 September 2025) will decrease from £1,849 to £1,720 for a typical customer."
Why it matters for households
The cap limits the unit rates and standing charges a supplier can charge on a default tariff, so a lower level flows through to what a household pays per unit of gas and electricity used, not to a fixed annual sum. A household using less than the typical consumption figures will pay less than £1,720, and one using more will pay more. The gap between payment methods remains: standard credit stays the most expensive route, and prepayment sits below Direct Debit at this level1. Energy UK said the new level is still 34% above pre-crisis levels2, and National Energy Action said it is around £580 a year more than the average annual bill in April 2021, which it put at £1,1384. For a home's exposure to gas market movements, the cap changes the price but not the underlying reliance: Energy UK said the cap is largely set by the price of gas, on which the UK is heavily reliant for heating and electricity production2, and the ECIU pointed to what it called chronic under-investment in insulating UK homes5.
What happens next
The new levels apply from 1 July to 30 September 20251. Uswitch said prices are due to increase slightly in the autumn at that point, but that this is not a guarantee, and that the wholesale market remains unpredictable3. Energy UK said wholesale prices for winter 2025/26 have been rising and the reduction may be short-lived2. Ofgem said it will monitor supplier compliance with the caps and take enforcement action where licence requirements are not met1.
Sources5 cited
- Summary of changes to energy price cap 1 July to 30 September 2025, ofgem.gov.uk
- Energy UK Explains: July 2025 price cap - Energy UK, energy-uk.org.uk
- Energy price cap to drop to £1,720 in July 2025 - Uswitch, uswitch.com
- Energy bills to fall 7% from July - National Energy Action (NEA), nea.org.uk
- Energy & Climate Intelligence Unit | Price cap: bills set to fall in…, eciu.net