It made the change following initial test feedback of the car, which was originally priced at £38,770. That initially made it more expensive even than a Porsche Boxster.
"The price and premise were wrong, and with the benefit of independent perspective we pushed very hard to get the pricing modified," said VW UK boss Robert Hazelwood, who confirmed the rest of Europe would also lower the price by a similar amount.
VW confirmed it will be cutting the list price to £33,170 - moving the Golf R Cabriolet into more palatable financial territory. By contrast the GTI Cabriolet starts from £29,755 and is just one second slower to 62mph.
The new price applies immediately, with VW promising to refund the difference on the six existing customer orders.
As a result of the price drop, VW UK has revised expectations of selling just 20 cars initially to more than 160.