Energy bills set to tumble by £139 annually with volatility | Personal Finance | Finance
Millions of households are poised to enjoy a £139 drop in annual energy bills from July, thanks to falling wholesale prices – but industry experts are urging consumers not to be lulled into a false sense of security.
The drop, which equates to a fall of 7.5%, would bring the average annual direct debit bill – based on typical use – down from £1,849 to £1,710.
The prediction comes from energy giant EDF amid a whirlwind of global economic upheaval – not least US President Donald Trump’s new tariffs, which have sent shockwaves through global energy markets.
The easing in wholesale costs is fuelling hopes of savings this through this summer to the winter and early 2026
But this brief reprieve could be short-lived, with warnings that price volatility and political tension could soon send prices soaring once again.
Rich Hughes, Director of Retail at EDF, issued a word of caution, saying: “Whilst the news that wholesale costs have eased will be a welcome relief, the best advice remains to consider a fixed or tracker tariff to lock these in.
“Swings downward aren’t indicators of a stable market – and as we’ve seen this week, prices can go back up just as quickly.”
He urged the government and Ofgem to reignite momentum for a social tariff ahead of winter, stressing that the most vulnerable must be protected from future spikes.
A YouGov survey for EDF found 67% of Britons believe Ofgem should focus more on reducing the energy costs for vulnerable customers – potentially through a targeted social tariff.
What’s behind the drop?
Recent weeks have seen gas prices fall to levels not seen in six months, amid expectations that Trump’s tariffs will dampen global demand. Fears of a full-blown trade war between the US and China – the world’s two largest economies – are stoking concerns of a slowdown, which in turn reduces pressure on energy markets.
“Trump’s tariffs are threatening to wreak havoc on the global economy,” said Suannah Streeter of Hargreaves Lansdown. “That may end up benefiting UK consumers in the short-term, with cheaper gas and oil.”
Dr Craig Lowrey of Cornwall Insight added that the outlook remains “volatile and unpredictable”, cautioning that geopolitical twists could just as easily reverse current trends.
Standing charges in the firing line
Industry watchdog Ofgem is reviewing controversial standing charges – flat daily fees added to bills regardless of usage – following 30,000 public responses. It’s exploring dual tariffs, one with and one without standing charges. But charities warn the plans may confuse customers and penalise the vulnerable.
Should you fix?
With energy prices expected to fall this summer, locking in now may seem unwise. But if you’re risk-averse, fixing could offer welcome cost certainty.
“If prices rise again in autumn, those on fixed deals could end up winners,” says EDF’s Rich Hughes. “But if prices drop further, they’ll be paying over the odds.”
