'UK still has one of the highest energy costs in Europe' despite Ofgem price cap change
In Europe, Germany, Belgium and Ireland have some of the highest household electricity prices
Ofgem confirmed this morning that the price for energy for a typical UK household will go down by 7% to £1,720 per year.
This will come into effect from 1st July to 30th September 2025, meaning for a typical household, this will reduce their energy bills by £11 a month.
However, the news hasn't been well received by everyone, as experts are warning that the UK is still far above the energy costs of most of Europe.
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Responding to today's announcement, Riz Malik, Director at R3 Wealth "warned the UK still has one of the highest energy costs in Europe."
He explained: "Global energy prices have fallen and hopefully this reduction will help keep inflation at bay. However, the UK still has one of the highest energy costs in Europe so we still get the rough end of the deal.
"The average £11 per month saving will no doubt be swallowed up in other cost of living rises so, although welcome, this reduction won’t make much difference to households across the country."
In Europe, Germany, Belgium and Ireland have some of the highest household electricity prices as of July 2024.
At the time, German households were charged around 0.39 U.S. dollars per kilowatt-hour, while in Belgium, the price stood at 0.37 U.S. dollars per kilowatt-hour, according to Statista.
Mr Malik wasn't alone in his concerns over energy costs, as Harry Mills, Director at Oku Markets commented on the "immense financial strain" UK households still face.
Mr Mills said: "While we welcome Ofgem's announcement of a fall in the energy price cap, make no mistake: many households remain under immense financial strain.
"Suppliers and policymakers must now focus on long-term affordability strategies for our energy, especially as UK households currently face the fourth highest electricity prices in Europe. But for now, at least it isn't going up."
Kundan Bhaduri, Entrepreneur at The Kushman Group was similarly critical, adding: "Ofgem's announcement of a life-changing £11 monthly savings during summer when heating remains firmly off is obviously Labour's regulatory courage at its finest.
"This 7% reduction during Britain's three warmest months arrives while energy giants reported £33 billion in profits last year. The mathematical wizardry is especially impressive: wholesale prices have dropped 23% while consumer bills fall just 7%.
"Most spectacularly, households still pay £1,720 annually, £650 above pre-crisis levels while our Energy Secretary will herald this as vindication of Labour's strategy, implemented right after they axed £400 winter support for millions.
"The cap itself remains a peculiar innovation, designed to prevent consumers being ripped off while somehow ensuring we pay Europe's highest rates."
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