April 2025 Energy Price Cap: UK Households Face Bill Hike

Millions of homes in the UK will feel the effects of a new rise in energy bills. The energy price cap is set to increase in April 2025. Ofgem indicates that the price cap level for a typical household from January 1 to March 31, 2025, will be £1,738. This amount is for people using gas and electricity and paying by Direct Debit. It is a rise of 1.2% from the last cap of £1,717.

Industry experts think that the energy price cap will rise in April 2025, leading to higher costs for households. Cornwall Insight predicts that the cap will reach £1,785 a year. This increase will affect UK energy bills. Households with standard variable tariffs may see their annual bills go up by about £47. There could be further changes later, depending on reviews from Ofgem.

UK households need to take action right now. Wholesale prices are rising. There are high standing charges, and the cost of energy is expected to change. It’s important to look for better energy deals before these increases take place.

Key Facts About the April 2025 Energy Price Cap Increase

• Price cap level (Jan – Mar 2025): £1,738 per year for a typical household.
• Projected increase in April 2025: A rise of about £47 per year for each household.
• Who is affected? 26 million households that use standard variable tariffs.
• Further changes expected in 2025: Ofgem will look at the price cap every three months.

Ofgem changes the energy price cap every three months. This update affects tariff prices. It is based on wholesale energy prices and other costs. The latest predictions from Cornwall Insight suggest that wholesale gas prices and electricity prices might remain high. This is due to unrest in Ukraine and the Middle East. Because of this, UK household energy costs could increase even more.

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Why Are Energy Prices Rising?

The cost of energy is based on the wholesale market. This impacts the prices that energy suppliers charge their customers. Several factors are causing this increase in price:

Rising Wholesale Energy Prices

• Wholesale gas prices are higher now due to supply chain issues.
• The UK still relies on fossil fuels, which keeps prices high.
• There is instability in the global energy market because of troubles in Ukraine, conflicts in the Middle East, and shifts in demand.

Higher Standing Charges and Tariff Costs

• The daily standing charge remains high, making the total bill higher.
• Variable tariffs adjust with the energy market, so price hikes affect bills immediately.

Government Support Changes

• The Energy Price Guarantee, which helped pay bills, is no longer in place.
• There are no new government plans to lower tariff price increases.

Cornwall Insight says the price cap limits might go up again in 2025. This will depend on what happens in the energy market.

How Much Will Your Energy Bill Increase?

For a typical household, the total bill increase starting in April 2025 will depend on your usage and the type of tariff you have.

Figures come from Ofgem’s new price cap data. The final rates for April 2025 will be confirmed in February 2025.

People who use a prepayment meter often pay more for their services. This means their bills can be higher due to these costs.

Standard Variable Tariffs vs Fixed Deals: Which Is Cheaper?

If you have a standard variable tariff, your prices will increase in April 2025. Households should consider getting a fixed deal. This can help you have more certainty about your energy costs.

Comparison of Standard Variable Tariff vs Fixed Deal

The Financial Times reports that some energy companies are offering fixed deals that cost less than the price cap. This could help customers save from £100 to £200 every year.

How to Save Money on Energy Bills Before April 2025

• Switch to a cheaper energy tariff: Some energy companies offer fixed deals lower than standard variable tariffs.
• Improve energy efficiency: Reduce kWh usage by insulating your home, using LED bulbs, and lowering heating settings.
• Claim government support: Check eligibility for Winter Fuel Payment, Warm Home Discount, and other schemes.
• Monitor daily standing charges: Some tariffs have lower standing charges, which can save money.
• Use Direct Debit: Paying by Direct Debit can sometimes lead to lower tariff prices.

How to Switch Energy Supplier and Lock in a Better Deal

Switching your energy supplier before the price cap increases is simple and quick. Here’s what you can do:

1. Compare energy deals: Use a comparison service to find the best energy tariff for your postcode.
2. Check exit fees: If you’re on a fixed deal, ensure there are no high cancellation charges.
3. Compare standing charges and unit rates: Some suppliers charge lower standing charges but higher unit rates.
4. Apply online: Most providers allow energy switch applications within minutes
5. Start saving: Switching takes 2-3 weeks, meaning lower bills before April.

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Are Energy Bills Expected to Rise Again in 2025?

The energy price cap is reviewed every three months. Changes in the future will depend on wholesale energy prices and the market’s performance.

Government Support & Assistance for High Energy Bills

• Warm Home Discount – £150 off winter bills for eligible low-income households.
• Winter Fuel Payment – £250-£600 one-off payment for pensioners in England, Wales, and Scotland.
• Energy Price Guarantee – No longer active, but government intervention remains possible.

MPs are concerned about affordability. They feel the government may need to help if the price cap continues to rise in the future.