Archive: MoneySavingExpert's Money Tips Email

Get off the Pants Cap...
Energy Price Cap to fall 7% on 1 July. Yet you can get a 'fall' of 18% today via the cheapest fix (& peace of mind your rate won't rise)

As Martin said, while Ofgem's announcement last Friday that the Price Cap will fall by 7% from 1 July was welcome news, it's nothing to write home about. All it really does is reverse April's 6% rise, so it's roughly back to the same cost it was at the start of the year. Crucially, energy bills this July will still be 10% more than they were at the same time last year. You can see Martin's instant video reaction to the news - including help with what it means and what you can do.

In simple terms, for the nearly two-thirds of homes still on the Cap...

For every £100 you currently spend on energy, you'll typically spend £93 from July (slightly more if you only have electricity, not gas). Yet the Price Cap is a Pants Cap - if you're on it, try to get off it!

Compare this fall to the cheapest fixes on the market today, which are up to 18% below the current Cap, and you can see why we call it a Pants Cap. You can FIX NOW to lock in a price cheaper than the current Cap AND cheaper than July's.

1. Are you on the Price Cap? Unsure? You likely are. If you live in Eng, Scot or Wales (see N. Ireland help), unless you're on a fix or special tariff, you're almost certainly one of the two-thirds of homes on a Price Capped tariff. The Cap applies to all firms' standard consumer tariffs - the default one you're on if you've never changed, or not switched since your fix ended. And while it's called a Cap, in reality almost all firms price to the max. Here are some common ones...

2. Exactly what is the new Price Cap? (Our new 'July calc' shows what you'll pay.) There's no total cap on what you pay, the Cap limits the daily standing charge and unit rates firms can charge, so use more and you pay more.

Below, we've the new average Direct Debit rates, but the Cap varies by region and payment method, so use our updated 'What will I pay from July?' calc to work out your new energy costs.

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. See the region-by-region caps.

To give you a scale, for a home on Ofgem's 'typical use' (a nonsense measure), the new annualised rate is £1,720/yr - that's £129 lower than the current £1,849/yr. Though this rate changes again in October.

3. LOCK IN at up to 18% LESS than today's Price Cap, saving immediately (it's 12% less than July's). A fixed tariff is where you lock in a rate for a set time, giving you the boon of certainty, but at the moment the best give direct savings too. As the cheapest fixes are lower than the current Cap, those on Capped tariffs can instantly reduce costs, and you'll still save against July's even after the drop (beyond that no one knows for certain, see how bills are predicted to change).

Your cheapest depends on your region and usage level.
Use our whole-of-market by default Cheap Energy Club comparison to find your winner.

Though remember, comparison sites (including our Cheap Energy Club) will currently show your savings compared to the current Price Cap, as firms' July Price Cap tariffs aren't published yet. That means savings will be exaggerated by 7%, and you need to factor that into your calculations. 

All deals below are available to new and existing customers.

Q. I'm on an old-school prepay meter. Can I fix? Sadly not. While some firms (sometimes) allow those on smart prepay meters to fix, frustratingly none allow those on old-school key or card meters to do so.

Q. Can I just grab my existing provider's fix? Yes, but this is about getting a cheap fix, be careful not to lock in at a high price. Use the Cheap Energy Club comparison to show how your provider's fix compares to the cheapest - if it's not too far away, then go for it.

Q. What is 'MSE cashback'? Some providers pay energy comparison sites to facilitate the switch (you still get the same price as going direct). Yet unlike other sites, we don't default to hiding tariffs that don't pay. Instead, we show them all, but when we get paid to switch you, we give you a chunk of it as cashback, so those that pay us are relatively cheaper for you, so likely more people switch to them. Win-win.

If you're a low user, bear in mind MSE cashback can boost savings even more, as it'll make up a higher proportion of your bill - we factor the cashback into your savings on Cheap Energy Club so you can see.

Q. Is getting a longer fix than these worth it? Well, it gives you price certainty for longer, and means you needn't switch as frequently. Yet no price predictions go further than about a year ahead, as the market is so volatile, so we're blind as to whether it's a good deal. Up to 18mths seems reasonable - longer than that and they can often cost more and have bigger early exit penalties. So it's really only for those who truly value certainty.

4. If current predictions are right, these cheap fixes will undercut the Price Cap for the next 12 months (though nothing's set in stone). The Price Cap is calculated based mainly on average wholesale costs - those energy retailers pay - over the three-month assessment period (we're already a week into that for the October 2025 Cap).

Most analysts are now predicting the Price Cap will come down again in October, but only by maybe 1% or 2% (though Cornwall is actually predicting a 0.5% rise), and will then go up a smidge in January and next April. So if the predictions are right, it's going to stay roughly about July's price over the next year. 

Of course,  the further out you go, the more predictions turn into crystal ball-gazing - and they do change regularly. So there is always a chance the predictions are wrong and things will get much cheaper.

We suggest you can only act based on what the common predictions are right now. We KNOW that the current cheapest fixes will stay cheaper than the Cap for the next four months until the end of September. After that, there are potentially still big savings -  IF the current predictions are right.

In the event things do move very substantially the other way and prices get much cheaper (either the Price Cap or the rate of new fixes), then you're always free to leave a fix. You just may need to pay the early exit penalties (unless you've 49 days or less left on your current fix). These have decreased in recent times to between £25 to £50/fuel for a 1yr fix, so just a few percent of a typical annual bill (though a bigger relative hit for lower users). If prices really dropped it'd be a reasonable option, and you'd have saved in the meantime.

5. I fixed before, prices have come down, have I lost out? (Spoiler: all the cheapest fixes over the last year have consistently undercut the Price Cap.) In Martin's new infographic below, you can see that at every point over the last year, on average you'd have been better off getting the cheapest 12mth fix than going on the Price Cap. So provided you went for the cheapest fix, you're good. Do compare the standing charge and unit rate of your fix to the July Price Cap for your region.

6. The specialist tariffs that are worth considering... While fixing is simplest, there are some other deals worth considering. Though a few are tough to display via the traditional comparison site model (we're trying to work through how to do it for future, as this becomes more common), so let us walk you through the main ones...

• Lower users get £50 off standing-charge tariffs. The EDF Simply Tracker tariff* tracks the Price Cap for around a year, but with £50/yr lower standing charges (£25/fuel). So for those who have very low usage (under roughly £80/mth) where the standing charges make up a larger portion of the bill, this can be a decent saving. It doesn't require smart meters unless you're on prepay, and the early exit penalties are £25 per fuel.
  

• Rapid change time-of-use tariffs: Octopus Energy. These are best for sophisticated users who get how energy markets work. With the Octopus Tracker tariff, rates change daily based on wholesale costs. It's been 30% cheaper than the Price Cap on average over the last year, but over the winter, it had periods of being costlier (especially when wholesale rates are higher).
  
  The elec-only Octopus Agile tariff's rates change half-hourly, based on wholesale prices, so much so it can be free or even pay you to use energy in the middle of the night, but can be very costly at peak times. It's good for those who can nimbly shift their usage to take advantage of super-cheap times or who have battery storage.
  
  The Octopus tariffs are only available for existing customers, though to get 'em, you could first try switching to the Flexible Octopus Price Cap tariff, then once in, switch to one of these.
  
  
• Got an EV? Consider a dedicated tariff. Several suppliers offer specific tariffs which let you get cheaper electricity overnight for charging your electric vehicle (EV). Full details of what's available in our EV tariffs guide, but in brief, there are two types:
  
  - 'Add-on' tariffs, where you can only charge your car on the cheaper rate. Ovo and Scottish Power offer these, so you can add EV charging to whichever of their tariffs you're currently on, and you'll get a cheap rate to charge your EV at any time. All other electrical use in your home will be charged at your existing tariff rates. So if you can get a decent fixed tariff from these firms, the fact you can charge your EV even cheaper is a boon.
  
  - Two-rate tariffs giving you cheaper elec overnight. Most EV tariffs offer five to seven off-peak hours a day (typically from midnight to 5am) and charge around 7p to 10p per kilowatt hour of elec use (the current Price Cap rate is 25p to 30p), though peak rates can sometimes go above the Price Cap rate. The benefit here is if you've other appliances that you can use overnight, they'll cost less too.
  

7. Can you cut bills by cutting your use? Obviously, cutting use cuts bills, so we've some detailed guides that can help:

- 70+ ways to save energy includes a mix of hardcore savings and some thrifty crowd-sourced tips. From cutting your boiler flowrate to tactical curtains, getting the right freezer temp and more.
- Energy mythbusting covers less clear-cut issues, such as: 'Is it expensive to run an electric fan?'

8. Are solar panels worth it? As well as helping you save on energy bills, solar panels can earn you cash - but they can cost an average of £7,000. So are solar panels worth it?

9. What to do if you're struggling to pay. It's always worth talking to your energy firm. Be polite and straight with it, and make sure you explain if you're vulnerable. There can be hardship & debt grants from energy suppliers. For far more guidance, see our full What to do if you're struggling to pay energy bills guide.

10. More pensioners could get the Winter Fuel Payment this winter. Winter Fuel Payments - a tax-free payment of up to £300 which previously had been made to ALL pensioners to help with winter energy bills - was restricted to those on certain benefits last year, meaning millions missed out. Yet the Government has now said that could change again this winter. Full details are yet to be announced, but Prime Minister Keir Starmer has said the Government will look at making the payments available to more pensioners. See Martin's reaction to this for more info.

11. There's no Price Cap in Northern Ireland. You're on a different energy system with different firms to the above. It's worth taking five minutes to go through the Consumer Council for Northern Ireland's energy comparison, or our Cheap Northern Ireland electricity guide.