Energy price cap rises again – here’s how much your bills will be

Energy prices are rising yet again after Ofgem hiked the cap by 6.4%. Annual bills for electricity and gas are estimated to reach around £1,849 for the average household in England, Scotland and Wales from April 1. This rise of more than £100, up from £1,738, is being largely blamed on an increase in the wholesale price of oil and gas, the energy regulator said.

Ofgem chief executive Jonathan Brearley said: ‘We know that no price rise is ever welcome, and that the cost of energy remains a huge challenge for many households. ‘But our reliance on international gas markets leads to volatile wholesale prices, and continues to drive up bills, which is why it’s more important than ever that we’re driving forward investment in a cleaner, homegrown system.’.

Every three months, Ofgem – the government energy regulator – assesses the energy market and sets a new maximum price per unit providers can charge households on a standard, or default, tariff. On January 1, this rose by 10%. It means 2025 is turning out to be a year of rising energy prices.

But it is still low compared the the peak of the energy crisis that followed Russia’s full-scale invasion of Ukraine three years ago, just as the opening up of economist post-lockdown was starting to fuel inflation. Skyrocketing wholesale costs, associated with Europe’s turn away from reliance on Russian gas, pushed the energy price cap to its worst level yet – £4,279.

It fell to £2,500 by June 2023 thanks to the government’s emergency Energy Price Guarantee. By July last year, it reached a low of £1,568 before the current rise began. From April 1, when the latest energy price cap kicks in, households paying bills by direct debit face an average annual bill of £1,849.

Until June 30, households on a standard variable – or default – tariff will pay an average of 27.03p per kilowatt hour (kWh), along with a daily standing charge of 53.8p. For gas, they will pay 6.99p per kWh, along with the daily standing charge of 32.67p.

To help households cope with these rising bills, Ofgem has announced an extension of the debt allowance, intended to support energy suppliers help customers who are struggling to keep on top of bills. But Brearley warned this may not be enough to help the growing problem. He said: ‘Energy debts that began during the energy crisis have reached record levels and without intervention will continue to grow.

‘This puts families under huge stress and increases costs for all customers. We’re developing plans that could give households with unmanageable debt the clean slate they need to move forward. ‘We welcome the Government’s support for these plans, and their plans to expand the Warm Home Discount, which will also offer financial help to nearly three million more households that need it most.

‘If anyone is worried about paying their bills, I would urge them to reach out to their supplier to make sure they’re getting all the help they can. ‘Where possible, switching or fixing tariffs now could also help to bring costs down and provide certainty over coming payments.’.

Expert advice is to submit a meter reading when prices rise so you won’t be charged the wrong rate for use that pre-dates the rise. Taking a reading later means you could be charged a higher rate for energy used before the price increased. A default tariff puts you at the whim of fluctuations in the energy markets. You could see your bills drop, but equally they could soar.

If you want more stability, you could opt into a fixed-price deal that sets your tariff for a specific period of time. Often this is for a year. Four million households have made this move since the last price cap was announced in November, according to Ofgem.

The largest move to fixed tariffs since the energy crisis, it brought total on fixed-price plans to 11million. Energy Secretary Ed Miliband has announced new proposals that would mean nearly three million more families receive the £150 Warm Home Discount next winter.

Calling the latest rise in the cap ‘worrying news for families’, Miliband said the government is ‘determined to do everything we can to protect people from the grip of fossil fuel markets’. He added: ‘Expanding the Warm Home Discount can help protect millions of families from rising energy bills, offering support to consumers across the country.

‘Alongside this, the way to deliver energy security and bring down bills for good is to deliver our mission to make Britain a clean energy superpower with homegrown clean power that we in Britain control.’. But the Conservative Acting Shadow Energy Secretary Andrew Bowie said the hike was a ‘betrayal to the families who Ed Miliband promised to save £300 on their bills’.

And Liberal Democrat leader Sir Ed Davey called for the increase to be scrapped for the pensioners who recently lost their Winter Fuel Payment. Get in touch with our news team by emailing us at webnews@metro.co.uk. For more stories like this, check our news page.