Martin Lewis issues 'bad news' warning as energy bills to rise again for millions of homes
Martin Lewis issues 'bad news' warning as energy bills to rise again for millions of homes
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Martin Lewis has warned how energy prices are set to rise again from this spring. The Ofgem price cap is currently set at £1,738 a year for someone with typical energy use who pays by direct debit - and the latest predictions point to another increase from this April. An announcement is expected from Ofgem on February 25. Writing on X/Twitter, Martin Lewis said: “Bad news. The predictions for what'll happen to the energy price cap in April keep rising. EDF now predicted Ofgem will increase it by 3.3% rise, British Gas predicts 5%, Eon Next predicts 5.7%. We're only a couple of weeks from the end of the assessment period. So that means this is getting pretty firm. Its now nearly unthinkable that it'll drop, it's going to rise, the big question is how much.”.
Energy analysts at Cornwall Insight currently predict the Ofgem price cap will rise to £1,785 a year from April, an increase of nearly 3%. It would mark the third consecutive energy bill increase, after the Ofgem price cap rose to £1,717 a year in October 2024, then to £1,738 in January 2025. But despite what its name suggests, the price cap does not actually limit how much you can pay for energy. What it does, is sets a cap on the unit rates you can be charged for gas and electricity, as well as the standing charges. This means if you use more energy, you'll pay more - or use less energy, and your bill will be less.
The headline price cap figure represents what the average billpayer will pay. Ofgem estimates that the average household consumes 2,700 kwh of electricity and 11,500 kWh of gas over 12 months. There are other factors to take into account. Unit rate prices vary by region, so your location can also effect your bill, and there are different rates for prepayment customers and those who pay on receipt of bill. Confusingly, the energy price cap figure represents a yearly bill, but it is updated every three months so Ofgem can reflect changing wholesale costs.
