From April, households across Great Britain will see their annual energy bills rise by £111 to an average of £1,849, following the latest increase in the energy price cap announced by Ofgem, the energy regulator. This marks the third consecutive rise, primarily driven by escalating wholesale prices, and exceeds initial forecasts. The 6.4% increase follows a 1.2% hike in January
The Energy Price Cap is set by Ofgem and is designed to protect consumers by capping the maximum price that energy suppliers can charge per unit of gas and electricity. This cap is updated every 3 months and impacts around 28 million households.
As a result of this latest increase, households will now be paying around £600 more per year for energy compared to pre-Ukraine war levels. Approximately 9 million homes on variable tariffs will see an immediate impact in April, while those on fixed tariffs will experience a delay before the changes take effect.
Key Points on the Latest Energy Price Cap:
1. Average standing charges and unit rates if you pay by Direct Debit:
| NEW Energy Price Cap rates from Apr 1st Jan to Jun 30th 2025 | Current Energy Price Cap rates from Jan 1st to Mar 31st 2025 | |
|---|---|---|
| Gas | Unit rate 6.99p per kilowatt hour (kWh) Standing charge: 32.67p per day | Unit rate 6.34p per kilowatt hour (kWh) Standing charge: 31.65p per day |
| Electricity | Unit rate 27.03p per kWh Standing charge: 53.80p per day | Unit rate 24.86p per kWh Standing charge: 60.97p per day |
*Rates and standing charges are averages, which vary by region. Assumes payments by Direct Debit and includes VAT (at 5%). For those who pay each month after getting a bill, it's 6% higher.
2. Impact on Annual Bills
Typical Annual Bill: A household paying by direct debit will have an annual bill of £1,849, which is a 6.4% (£111) increase from the previous period (Jan to Mar).
3. Standing Charges:
This is a charge you pay on a daily basis irrespective of how much (if any) energy you use.
Electricity: Standing charge: 53.8p/day (from 60.97p) - down 11.8%.
Gas: Standing charge: 32.67p/day (from 31.65p) - up 3.2%.
4. Support for Vulnerable Customers:
All energy suppliers, under Government rules, need to provide support for certain customers such as the elderly, the vulnerable, those with young children and those in fuel poverty. If you think you might qualify for support you should contact your energy supplier. There may also be additional support you qualify for, and more information can be found at Energy UK.
5. Warm Home Discount Scheme
The unexpected increase is a setback for the government's pledge to reduce energy bills by up to £300 by 2030. In response, the government has proposed expanding the Warm Home Discount scheme, which provides eligible households with a £150 reduction on winter energy bills. The expansion would extend eligibility to an additional 2.7 million households, including nearly a million families with children, bringing the total beneficiaries to 6.1 million. There is a scheme for England and Wales and a separate scheme for Scotland - no option exists for Northern Ireland.
It is important to note that the cap applies to standing charges and unit rates, not the total bill. There is no limit to the overall amount a household may pay and the more energy used, the higher the bill. The estimated costs provided are based on a 'typical household' consuming 11,500 kWh of gas and 2,700 kWh of electricity annually, which serves as the basis for the average bill mentioned above.
Considerations for Fixed-Price Deals
If you’re on a variable tariff from your energy supplier and subject to the Energy Cap, there will be cheaper alternatives available.
The cheapest year-long standalone fixes right now are about 4% lower than the current Cap, and this is before the April increase is taken into account. Some of these tariffs also allow free switching if prices drop in the future.
You can search for options here.
Summary
With the Energy Cap increasing by over 6%, you could save money by fixing your tariff so it may be something to look at sooner rather than later.
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Remember the content provided in this article is for information purposes only and should not be considered as advice.
