Ofgem has today announced the July - September 2025 Default Tariff Cap (price cap) at £1,720 a year for a typical dual fuel consumer1. This is a 7% decrease from April’s cap set at an annual rate of £1,849.
Looking ahead to the final three months of the year, our latest predictions for October-December show little change from the newly announced figure, standing at a forecasted £1,727 per year.
A fall in wholesale market prices, following the announcement of US tariffs, helped drive the July price cap drop, alongside milder than average temperatures, and other calming influences on the market, such as the prospect of Europe easing its gas storage rules.
While our current forecast points to little overall change in the October cap, there are still three months to go, and much could change – particularly in the wholesale market. The UK’s heavy reliance on imported energy leaves it very vulnerable to international market volatility. Developments in areas such as the Ukraine - Russia negotiations, EU–US trade talks, or even changing weather patterns, could all push prices up or down in the months ahead.
Adding to this, several policy decisions are being taken by Ofgem prior to the winter cap being announced, including the finalisation of longer-term arrangements for covering the supplier costs associated with consumer debt. These developments have the potential to have a notable influence on the level of the October cap.
Figure 1: Cornwall Insight’s Default Tariff Cap Forecast Based on Typical Domestic Consumption, and Per Unit Costs and Standing Charge Values (dual fuel, direct debit customer)
| QUARTERLY | Oct - Dec (Q4) 2025 TDCV Forecast | Standing charge (£/per day) | Per Unit Cost (p/kWh) |
| Electricity (2,700 kWh) | £907.76 | 0.55 | 26.22 |
| Gas (11,500 kWh) | £818.82 | 0.34 | 6.05 |
| TOTAL | £1,726.58 |
Source: Cornwall Insight’s Default Tariff Cap Forecast Service
Note: All figures are national average unless otherwise stated. All intermediate and final calculations are rounded to two decimal places. Totals may not add due to rounding.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight:
"This fall in the energy price cap is undoubtedly welcome news for households, offering a degree of relief at a time when many are grappling with high living costs, and rising inflation. Lower prices in the warmer months are helpful, but the real benefit could come in October. With energy use typically rising as we head into winter, any drop in bills later in the year would be especially valuable for families trying to manage the high costs in the lead up to the Christmas period.
"While it’s important to celebrate the small wins, the energy market remains unpredictable. We know recent declines in wholesale prices have helped bring the cap down, but global events - from geopolitical negotiations to shifts in trade and weather - can quickly reverse that trend. Plus, even with the cap coming down, bills are still higher than what we used to consider ‘normal’, so support is still very much needed. The outlook may be improving, but we’re not out of the woods yet, and energy affordability must remain a priority."
Reference:
1. Ofgem’s Typical Domestic Consumption Values (TDCVs), are set at 2,700 kWh per annum for electricity, and 11,500 kWh per annum for gas.
