Energy bills are set to fall by 7% from July, but regulator Ofgem is urging homeowners not to rely on the energy price cap alone, warning that switching to a fixed tariff could lead to bigger savings.
Despite the summer drop, many households could still be overpaying for their gas and electricity.
The regulator says switching to a fixed tariff could save hundreds more and provide greater payment certainty.
Price cap to drop – but savings are modest
From 1 July, the energy price cap will fall by £129 a year for a typical household, lowering average bills to £1,720.
This marks the first decrease in a year and follows a drop in wholesale gas prices. While welcome, the cut simply reverses the April hike and leaves bills higher than they were a year ago.
The cap applies to 21 million homes on standard variable tariffs in England, Scotland, and Wales, but not Northern Ireland.
Better deals for those who switch
Ofgem says customers could save up to £200 annually by locking in a fixed-rate deal, which provides price certainty for 12 months.
While 35% of households are now on fixed tariffs, many remain on default variable deals.
Ofgem’s Tim Jarvis stated: "The first thing I want to remind people is that you don't have to pay the price cap – there are better deals out there so it's important to shop around, and talk to your existing supplier about the best deal they can offer you".
He suggested homeowners should compare tariffs or contact their supplier for better options.
Not everyone can switch — and bills remain high
Some households remain stuck on default tariffs due to debt or lack of confidence after poor experiences switching suppliers.
Charity National Energy Action warns that vulnerable consumers need more than just market choices to afford their bills. And while the summer drop provides some relief, price rises are still significantly above pre-crisis levels.
Money expert Martin Lewis dubbed the cap a “Pants Cap,” advising most customers to fix now and beat the cap entirely.
