British Gas issues urgent message to customers to act before July | Personal Finance | Finance
British Gas has issued an urgent message to customers to act before July ahead of Ofgem’s new price cap taking effect. The price cap is reviewed and changed by the energy regulator every three months, with new rates taking effect in January, April, July and October.
The cap sets the maximum rate per unit and standing charge that suppliers can charge customers in England, Scotland and Wales for their energy use. The amount rates are set at is largely determined by wholesale costs facing suppliers for providing energy and thanks to a recent fall in prices, the price cap is set to come down from July.
Ofgem has confirmed a 7% fall in energy prices for the three months from July 1, meaning the price cap will drop from its current rate of £1,849 per year down to £1,720. The reduced price will give households on standard variable tariffs an annual saving of £129 on average – or around £11 per month.
But the cap only sets the maximum rate per unit and standing charge that customers can be charged by suppliers for their energy use – not the total bill. So if your energy use is above the average you’ll pay more and if it’s below you’ll pay less.
Not all households are subject to the price cap as it’s only paid by those not currently on a fixed tariff, so if you switch it’s possible to undercut the price cap significantly.
In an urgent message to customers, British Gas urged households to “lock in” to a cheaper fixed price tariff now before the new July rates kick in.
The energy supplier said: “Ofgem has announced that the energy price cap will decrease on 1st July, meaning variable tariff rates will go down.
“Our fixed price tariffs are even cheaper than the July price cap, allowing you to lock in a low rate now and avoid potential price rises if variable rates increase later.”
A fixed tariff allows you to lock in the cost of your energy for a fixed period of time, usually a period of 12 months, meaning you won’t be affected by any changes in wholesale prices throughout the year.
This means you’ll know exactly how much you’ll pay per unit of gas and electricity which helps with budgeting and it protects you from any significant shifts in the energy market during the course of your fix. But there is a risk that wholesale energy prices could fall even further and you’ll miss out on these savings as the cost of your energy will stay the same.
British Gas adds: “On 23rd May, Ofgem announced that energy unit prices and standing charges will decrease from 1st July 2025. If you’re on a variable tariff, this means you’ll pay less for your energy.
“The energy market has been more stable recently, but surprises can happen. Global politics play a big role in energy prices. For example, if conflicts in Ukraine, or the Middle East worsen, wholesale gas prices could go up. This would eventually mean higher bills.
“There’s ongoing talks about how the next price cap is calculated, and other energy rules which could affect prices in 2025, changing these predictions.
“Energy bills are expected to remain high for the next few months. By choosing a fixed tariff, you’ll lock in your rates for the duration of your contract.”
