After months on end of price rises, customers from every energy firm including British Gas, E.On, OVO and Octopus Energy are set for a £129 boost from Tuesday.

The cost of a typical household's annual gas and electricity bill will reduce by £129 for a dual-fuel household.

That's because energy regulator Ofgem has announced that prices for households on standard variable tariffs - which is still most households - are going to reduce by 7% from Tuesday, July 1. Prices will drop from £1,849 to £1,720, a saving of £129. Of course, that's just an illustration of a typical bill for an average household - if you used twice as much gas and electricity, you'd pay twice as much - £3,440 - but save twice as much too - £258.

The unit rates will be decreased from Tuesday for both gas and electricity, as well as the standing charges.

From Tuesday, electricity will cost 25.73p per unit, down from 27.03p, while the standing charge will reduce from 53.80p per day to 51.37p.

For gas, unit rates will decrease very slightly, from 6.99p to 6.33p, while standing charges will go down from 32.67p to 29.82p.

Ofgem said in its announcement: "Between 1 July and 30 September 2025, the energy price cap is set at £1,720 per year for a typical household who use electricity and gas and pay by Direct Debit. This is a decrease of 7% compared to the cap set between 1 April to 30 June 2025 (£1,849).

"The price cap also makes sure that prices for people on a standard variable tariff (default tariff) are fair and that they reflect the cost of energy.

You are covered by the price cap if you pay for your electricity and gas by either:

• standard credit (payment made when you get your electricity and gas bill)

• Direct Debit

• prepayment meter

• Economy 7 (E7) meter"

Those who are not on a fixed deal will see their prices change from 00.01am on Tuesday.

In the meantime, it's a good idea to take a meter reading as close to midnight on Monday as you can. That's so that you make sure you have a record of your usage during the more expensive period, so that you are charged accurately for what you used and don't get charged the higher amount for energy you use on Tuesday, once prices drop. It should also be noted that claiming you used energy on Tuesday that you actually used on Monday is fraud, so don't submit a false reading.