Energy prices from July 2025, and what they mean for you
Ofgem (the energy regulator) announce energy prices will be falling from July 1 by around 7%. Octopus remain the only large supplier to have never charged the full Ofgem price cap.
We'll get in touch with every customer this affects, with a personalised breakdown of what this means for you.
To get a sense of how the price cap could change over the year, check out our price cap predictions page. Just keep in mind that there are no guarantees.
Summary of changes
Lower wholesale costs mean prices are falling - around £120 a year for a typical home.
The price cap limits the amount an energy supplier can charge for units of gas and electricity. It also impacts the standing charge which is the daily cost per fuel type and is set by Ofgem.
Once again, Octopus prices are lower. We remain the only large supplier to have never charged the full amount allowed by Ofgem's price cap.
How much you're actually charged will depend on how much energy you use; so those who use more, will pay more.
Good to know: if you're not paying by Direct Debit, you could save a further £93 on average by setting one up with us. It's super quick and easy to get set up in your online account.
If you ever find yourself struggling to pay we have lots of support on offer.
Frequently Asked Questions
General
If you’re on a variable tariff, like our Flexible Octopus, the Ofgem Price Cap protects the price you pay.
The price cap specifically applies to variable tariffs because they aren’t fixed against the volatility in the energy markets. Different suppliers can refer to these tariffs in a number of ways; standard variable tariff (SVT), non-fixed, etc. At Octopus our variable energy tariff is called Flexible Octopus.
If you’d like to confirm which tariff you're on, and details like your current prices and contract dates, you can see them on your online account (scroll a little way down and look at the details below your property address).
You can read more about the energy price cap and whether it affects you on Ofgem’s website.
No: this figure is not the absolute maximum a customer could pay.
If you’re affected by the price cap, the protection you receive is relative to how much energy you use.
Ofgem calculates the price cap based on the yearly usage of a typical medium consumption home (that's 2,700 kWh of electricity and 11,500 kWh gas per year). It represents the maximum amount Ofgem considers fair for energy suppliers to charge customers on variable tariffs.
This figure is used by suppliers to apply the price caps protection against each customer's actual usage. Put simply: if you use more - or less - energy than that typical home, your own yearly energy costs on a tariff priced at the maximum rates may be higher - or lower - than the annual figure from Ofgem.
Payments
Our Flexible tariff will have slightly different unit rates and standing charges based on your payment method. The £93 isn’t a flat discount for Direct Debit customers (or a charge on non-Direct Debit customers) – it’s the typical savings an average home could see over a year on the cheaper Direct Debit dual-fuel rates.
If you change how you pay, our system will pick that up and adjust your rates automatically, so if you don’t have a Direct Debit right now, it’s super easy to access the cheapest prices. All you need to do is set up a Direct Debit online and we’ll do the rest.
Not having a Direct Debit creates us significantly more admin.
We don't think it's fair to make everyone cover that extra cost, so we do offer a cheaper rate for those who choose to pay by Direct Debit, which costs us less to manage.
Your energy prices depend on where you live and how you choose to pay. Below is a breakdown of all Flexible Octopus rates and charges by region and payment method.
Flexible Octopus prices for customers who pay by Direct Debit
Flexible Octopus prices for customers who pay by other methods (i.e standard credit)
Flexible Octopus prices for Smart Prepayment customers
Flexible Octopus prices for Trad (non-smart) Prepayment customers
It costs us more to supply energy to some areas depending on things like proximity to generators, cost of maintaining local networks and more.
The same is true with different payment methods – for example, it costs suppliers more to administer and manage accounts that don't pay by Direct Debit, so Ofgem factors that into their Price Cap.
The price cap sets a maximum rate for:
Energy units: the price suppliers can charge variable tariff customers per unit of gas and electricity you use
Daily standing charges: the price suppliers can charge per day for ongoing costs, like paying the companies who manage distribution networks, operating costs, etc.
Ofgem have shared that on average - for customers paying by direct debit - the unit rates (inc. VAT) will be:
Electric:
25.73p / kWh
51.37p / day
Gas:
6.33p / kWh
29.82p / day
Important: these are averaged figures from across all regions in the UK. As certain costs vary, e.g. what transmission network fees we pay in an area, the actual maximum unit rate varies depending on region. There are other factors too: different maximum rates for Economy 7 tariffs (which have a day and a night price) and prepayment meters.
You can see Ofgem's figures on the price cap standing charges and unit rates here.
Fixed Tariffs
We can't really say whether it would be the best choice for you; it's best to compare rates for your area online and see if it would save you money.
If you’re on a fixed tariff, the first thing to know is that the price cap doesn’t affect your current energy contract.
We’ll always email you in advance of your fixed tariff coming to an end.
If you’d like to confirm your current prices and contract dates, you can see them on your online account (scroll a little way down and look at the details below your property address) or on any PDF energy statement. It’s usually on the second page, near the top of the breakdown for your electricity and / or gas charges for the period.
Published on 30th June 2025 by:
Joe Richardson
Operations Director