Ofgem cuts energy price cap
Step in the right direction following fresh wave of rising costs and critical moment for households to reassess their options.
23rd May 2025 07:14
by Myron Jobson from interactive investor
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “Any reduction in energy bills is a step in the right direction for households, which have been hit by a fresh wave of rising costs since the start of the new tax year.
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“However, it is important to remember that there is no such thing as an ‘average’ household – everyone’s costs will differ. Ofgem’s price cap only limits the amount you can be charged per unit of gas and electricity, not your total bill. The amount you pay depends on how much energy you use. That said, with warmer weather and longer days, it’s likely we will all be using less energy.
“Standing charges remain a thorny issue. These are applied to gas and electricity bills regardless of whether any energy has been used, making it more difficult for people to save money by cutting back on consumption.
“This is a critical moment for households to reassess their options. Ongoing geopolitical pressures mean the future direction of energy prices remains uncertain. For those considering a fixed-rate deal, this may be an opportunity to lock in lower prices and protect themselves from future market volatility.
“However, it’s essential to weigh the benefits against potential exit fees, which could prove costly if prices continue to fall. Now more than ever, comparing the market is vital – there is real potential to save money if you take the time to shop around.”
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