THE “money saving expert” Martin Lewis has issued some key advice for billpayers in the wake of Ofgem announcing that the energy price cap will drop by seven per cent from July.
The watchdog said on Friday morning that the average annual bill for a dual-fuel household would fall from £1849 to £1720. This is around 10% higher than it was in July 2024, when the price cap was £1568, and roughly equivalent to the price cap in January of this year, when it was £1738.
Writing on social media, Lewis said that Friday’s announcement was “nothing to shout about” and urged people to “get off the cap” with a cheaper energy provider.
The expert said that some firms were offering rates as much as 18% below the energy price cap – which he called a “pants cap”. Lewis said that people paying the price cap could find “potentially large” savings by switching provider.
He said: “Today’s announcement that the price cap is to fall by 7%, is welcome, but nothing to shout home about.
“All this really does is reverse April's rise so it's back to roughly the cost at the start of the year.
“Crucially, energy bills this July will still be 10% higher than at the same time last year.”
The Price Cap to fall 7% on 1 July (though it's still a Pants Cap). What it means & the new rates... Today’s announcement that the Price Cap is to fall by 7%, is welcome, but nothing to shout home about. All this really does is reverse April's rise so it's back to roughly the…
— Martin Lewis (@MartinSLewis) May 23, 2025
He went on: “What is the new cap? Here are the new July average Direct Debit rates (prepay is slightly less, pay in receipt of bills more). Though it varies by region.
Electricity: Standing charge 51.37p/day (now 53.8p) down 4.5%. Unit rate 25.73p/kWh (now 27.03p) down 4.8%. Gas Standing charge: 29.82p/day (now 32.67p)down 8.7%. Unit rate: 6.33p/kWh (now 6.99p) down 9.4%.
“In simple terms it means for every £100 you pay for energy now, in July, August and September you will typically pay roughly £93.00.
“As the cut is on both unit rate and standing charges, this time the impact is pretty uniform for lower and higher users, though those with gas will typically see more of a fall, as its price is falling more than electricity.
“The cap is still a pants cap. “Compare these falls to the cheapest fixes on the market today, which are 18% below the current cap, showing the price cap is a pants cap.
“It was only ever meant to be a back-stop tariff for those unable to switch, yet during the energy crisis it effectively became a regulated price, and still today, 65% of homes are on tariffs dictated by the cap.”
Lewis said that households on pre-payment meter had “sadly little choice” and suggested using a whole-of-market comparison website like his Money Saving Expert’s CheapEnergyClub.com “to find their cheapest fix”.
“That will instantly cut bills, without any need to wait until July, and if analysts' current price cap predictions prove true, would substantially undercut the cap in every period for the next year,” he said.
“Our recent analysis shows that at every point over the last twelve months, grabbing the cheapest fix on the market would’ve saved you substantially over the price cap.”
Citizens Advice chief executive Clare Moriarty said: “This drop in energy prices will ease the burden of high bills for some households. But the Government must not lose perspective: Bills will still be 52% higher than before the energy crisis and nearly seven million people live in households that have fallen behind on bills.
“Today’s announcement will be cold comfort to the millions paying off a mountain of debt on top of their monthly costs.”
