Last Updated: 01/03/2025
As we approach April 2025, Ofgem has declared a significant rise in the energy price cap to £1,849, a 6.4% increase from the previous cap of £1,738. This rise is set to impact the average annual UK energy bill due to shifts in the global energy market, particularly a notable spike in wholesale prices.
The updated price cap details for the period from 1 April to 30 June 2025 are as follows:
Electricity Prices: The unit price per kWh will escalate to 27.03 pence from 24.86 pence, paired with a decrease in the daily standing charge to 53.80 pence from 60.97 pence.
Gas Prices: The unit price per kWh will increase to 6.99 pence from 6.34 pence, and the daily standing charge will adjust to 32.67 pence from 31.65 pence.
This adjustment comes as part of Ofgem’s strategy to review the price cap quarterly, a practice initiated in January 2023, to ensure that pricing remains fair and reflective of the actual costs of energy amidst fluctuating market conditions. The next review dates are scheduled as follows:
These updates are crucial for approximately 29 million UK households, particularly as potential colder-than-average weather conditions loom, which could intensify energy use and expenses. Consumers are encouraged to consider locking in their rates with fixed energy tariffs to shield themselves from future price increases. Explore our detailed guide on the best fixed price energy tariffs here to secure your energy costs against these predicted rises.
“With energy prices rising yet again from 1st April 2025, we strongly urge all customers languishing on a “Standard Variable” tariff to switch, fix and save as soon as possible. By not doing so, you’re simply signing up to spend almost £200 a year on average for your home energy bills."
- Scott Byrom, Chief Executive Officer
The 'Energy Price Cap' is a legal requirement that energy suppliers must comply with in an attempt by Ofgem, the energy regulator, to protect households against unfair rises in gas and electricity costs and being overcharged for their home gas and electricity. The cap puts a limit in place on what suppliers can charge customers who are on either standard variable or default energy tariffs.
It is these tariffs that around 29 million of the UK remain on and are, in any normal time, amongst the most expensive forms of energy tariff with savings now available of around £160 below the new price cap level.
Price caps work by setting a limit on the rates a supplier can charge for each unit of gas and electricity. Many households are stuck on expensive default tariffs that they have fallen into after a fixed rate energy deal has expired, when they move in to a new property or if they have never switched their gas and electricity provider. With the cap in place, suppliers can only charge up to a set amount for their default energy tariffs, therefore apparently (as Ofgem claims) saving households money on their energy bills.
Your tariff details are on your energy bill. You can see if you are on a "Standard Variable" tariff or, if you switched to an energy supplier after another supplier went bust, a "Deemed Contract." If you are on a fixed-rate energy tariff, the cap will not apply to you until your energy tariff expires.
Even with the cap in place, this doesn't mean you won't end up paying more for your energy each year. Price caps are set at a unit price (the amount you pay for each kilowatt hour used) plus standing charges (the amount charged each day whether you use energy or not). With the cap being set by averaging out annual energy usage, if you use more energy than the medium Typical Domestic Consumption Values (TDCVs) - meaning "the average household", you will still be charged extra. Equally, if you use less, then your annual energy bill will be lower.
Price caps are also based on your region due to transportation costs and you could see higher rates if you don't pay by direct debit.
Usually, with the cap in place for standard variable or default tariffs, the best way to make big savings to your energy bills is to switch to a cheaper, more often "fixed", energy tariff. This could be with your existing energy supplier or moving to a new one altogether. As the price cap doesn't protect you from price fluctuations, it's generally best to consider a fixed rate plan to lock in your energy costs for a set period of time, e.g. 12-24 months.
Want to be amongst the first to be notified when more competitive energy tariffs become available? Enter your email address here...
The Energy Shop is a free, independent and impartial energy comparison service. We can help you compare and switch energy suppliers to save money. Our service is accredited by the Ofgem Confidence Code.
