Ofgem’s energy price cap will fall by £84 from 1 July, taking a typical dual-fuel household’s annual bill to £1,690. That is the lowest level since Russia’s invasion of Ukraine sent wholesale gas prices into orbit three years ago. But the headline masks a stubborn problem: standing charges are barely budging.
As reported by The Irish News, the cap applies to default tariffs in Great Britain and Northern Ireland. For a typical household paying by direct debit, the unit rate for electricity will drop to about 24.5p per kWh and gas to about 6.2p per kWh. The standing charge, the fixed daily cost just to be connected, will stay at roughly 60p a day for electricity and 31p for gas.
Who qualifies, and who doesn’t
The cap covers all households on standard variable tariffs, which is about 85% of homes. If you are on a fixed deal, you are not affected until it ends. Ofgem adjusts the cap every three months based on wholesale prices, network costs, and policy charges. This July’s drop reflects lower wholesale gas prices, but network costs and social levies have crept up.
The catch is that standing charges have risen by roughly 30% since 2022, even as unit rates fall. That means low-use households, pensioners living alone, small flats, see a smaller percentage saving. A household using 1,800 kWh of electricity a year (typical for a one-bed flat) might save only about £30 under the new cap, while a 4-bed house using 4,500 kWh could save £120.
What it costs a typical 3-bed semi
Take a 3-bed semi in Manchester using 12,000 kWh of gas and 2,900 kWh of electricity a year. Under the July cap, their annual bill falls from £1,774 to £1,690, a saving of £84. The standing charges alone account for about £330 of that total. That is roughly £28 a month just to stay connected, before a single kWh is used.
Energy Saving Trust data shows that improving a home’s EPC rating from D to C can cut typical gas use by 20–30%. For that semi, that means shaving £200–£300 off the annual bill, far more than the cap drop delivers. The best long-term hedge against cap volatility is fabric efficiency: loft insulation, cavity wall fill, and draught-proofing cost a few hundred pounds and pay back in two to three years.
What this misses, and what you should do
The cap reduction is welcome but it is a sticking-plaster fix. The real problem is that the UK’s housing stock is among the leakiest in Europe. Ofgem’s own figures show that households in EPC-rated G homes pay about £1,000 a year more than those in C-rated homes, even on the same tariff.
Grants are available. The Great British Insulation Scheme offers free or heavily subsidised cavity wall and loft insulation for low-income households. The Boiler Upgrade Scheme gives £7,500 off a heat pump. Solar panels with a battery can cut a typical bill by £400–£600 a year, and the Smart Export Guarantee pays for surplus power sent to the grid.
Households on standard variable tariffs should check if they can switch to a fixed deal. Some fixed tariffs are now cheaper than the cap, a rarity since 2021. Compare at Ofgem-accredited sites. If you are on a prepayment meter, the cap is slightly lower, but you are also more likely to be in a less efficient home.
The July cap is a reprieve, not a solution. The only way to make energy bills genuinely affordable is to stop needing so much of it. That means insulation, heat pumps, solar, and better glazing. The cap will move again in October. Your home’s efficiency is the one thing you can control.
Frequently Asked Questions
No. Standing charges will remain near record highs, roughly 60p per day for electricity and 31p for gas. Ofgem is consulting on a reform to standing charges but no changes are expected before 2026.
It depends. Some fixed tariffs are currently 5–10% below the July cap, but they lock you in for 12 months. If wholesale prices rise again, a fix protects you. Use an Ofgem-accredited comparison site to check current offers.
