- Energy bills will increase by £111 a year for a typical household from April
- Ofgem recommends considering a fixed rate tariff
- The price hike is due to rising wholesale costs and inflation
Energy bills for a typical household will rise by £111 a year from 1st April, a higher than expected increase, Ofgem has confirmed today.
The increase means a typical dual-fuel household will see their annual bill rise to £1,849 a year, a 6.4% hike. Currently, the price cap between 1 January to 31 March was £1,738 a year.
Ofgem’s Energy Price Cap is set every three months and puts a limit on what suppliers can charge consumers for each unit of energy. It impacts the bills of more than 20 million households in England, Wales and Scotland.
The regulatory body said billpayers should consider switching to a fixed tariff, although analysts predict prices will fall again in July.
Before today’s announcement, Cornwall Insight and other industry analysts forecast a 5% hike in April, but this 6.4% increase means bills will be £159 a year more than April 2024.
Ofgem also confirmed the reason for the price hike is due to rising wholesale costs and inflation, marking it the third consecutive price increase in the quarterly cap.
Dr Craig Lowrey, principal consultant, Cornwall Insight, commented on the increase: “There is a sense of déjà vu in the energy market as we watch the price cap rise for a third consecutive time, with the volatile international wholesale market once again the main culprit.
“Households have been promised falls in bills, and many will be understandably irritated with what they may see as a failure of government energy policy.
“However, the reality is, our gas-led wholesale power market and reliance on international imports limits the impact of what any government policy can have – at least in the short term – there is only so much you can do when prices are rising across the world.”
The energy price cap announcement also ensures prices for people on a default tariff (standard variable) are fair and reflect the cost of energy.
Households are covered by the price cap by either:
- Standard credit (payment made when you get your electricity and gas bill)
- Direct Debit
- Prepayment meter
- Economy 7 meter
The announcement follows water and council tax increases, too.
Electricity and gas unit prices from 1 April to 30 June 2025
The cost of electricity and gas per kWh changes every three months.
Until 1 April, electricity prices per kWh is 24.86p and gas is 6.34p.
From April, this will increase to 27.03p per kWh for electricity and 6.99p per kWh for gas.
Households also pay a daily standard, which will be 53.80p for electricity and 32.67p for gas from April. All pricing increases are inclusive of 5% VAT.
Overall, a typical household will be paying £111 more a year for their energy bills, or an additional £9.25 a month.
Although a little confusing, the actual rates you’re charged will depend on where you live, how you pay your bill and the type of meter you have.
For example, in the North West, your unit rate from January to March 2025 is currently 25.36p per day, and will increase to 27.93p per day per kWh. This is an increase of 50p higher than the national average.
The only region to be paying less than the national average is the East Midlands and Midlands. In the East Midlands, households will be paying 26.37p per kWh for electricity from April to June 2025 – a decline of 66p per unit. Across other areas of the Midlands, the price for electricity will be 26.46p per kWh, a drop of 57p.
For a full list of your region, check out the Ofgem website or our guide on What’s the price of electricity per kWh right now?
Energy Price Cap tracker
Take a look at how the Energy Price Cap has changed since it was first introduced in January 2019 in our chart below.
Between October 2022 and March 2023, during a period of particularly high gas prices, the government provided households with £400 through the Energy Bills Support Scheme (EBSS). This was paid via monthly installments and was reflected on household energy bills.
While energy prices have come down significantly since that period, they have still not returned to pre-Covid levels.
What are the most cost-effective ways to reduce energy bills?
If you’ve been pushing energy-saving solutions to the bottom of your to-do list, now is the time to change that.
Some changes require significant upfront costs, a huge barrier, especially as households are grappling with the cost of living crisis. However, others are low cost to install.
The first thing we recommend is check your house for any draughts. If you find the source, you can then research suitable solutions, as draught-proofing windows and doors can save you roughly £35 a year.
For your doors, you can get a draught door excluder – a long, stuffed, cushion-type device that’s heavy enough to block out draughts. It lays across the door and will prevent cold outside air from coming into your home. You will be able to buy these in most discounted retail stores or online for a small cost. Prices range from £4 to £30.
Other changes include:
- Install LEDs: Swap your bulbs for LEDs, each bulb can save up to £5 a year on electricity. You’re also less likely to need to replace them as often as standard bulbs
- Look after your fridge: Avoid putting warm food in it straight away as it works harder to cool down. Regularly clean it too.
- Utulise food waste apps: Apps, such as Too Good to Go, allow you to buy food at a discounted rate. They often go past their sell by date meaning stores can no longer stock it, but it’s still good to consume. This can help save money on lunches or other meals.
- Replace worn-out windows: Almost 45% of energy escapes from windows, so if you’ve yet to install double-glazing, it might be worth looking into.
- Insulate your home: There are different types of insulation to consider, such as cavity wall and pipe insulation.
Get a double-glazing quote
Answer a few simple questions, and a trusted double-glazing installer will be in touch with a bespoke quote for your home.
There are lots of other ways to reduce your energy bills, but you can dive into fourteen ways by using our guide.
Also check out our guide on improving your EPC rating, as this can also help reduce your energy bills overall.
Think about renewable energy options
According to The Eco Experts National Home Energy Survey 2024 more than half of homeowners cite reducing their energy bills as a key motivation for adopting low-carbon technology and renewable energy.
The most-common forms of low-carbon technology include:
Get a solar panel quote
Answer a few simple questions, and a trusted solar panel installer will be in touch with a bespoke quote for your home or business.
Some will require high upfront costs, but there are government incentives to help:
- The Boiler Upgrade Scheme
- ECO4 Scheme
- Warmer homes Scotland
- Nest – for households in Wales
- Home Upgrade Grant
Some installers also offer finance options to help you spread the upfront costs.
What can you do if you’re struggling?
If you’re struggling to pay your energy bills, the first port of call should be to contact your energy supplier.
You can ask about a payment plan that works for you, ask about any hardship funds or ask if you can pay smaller amounts more often.
Also check to see if you qualify for any grants or schemes from your local authority. Some charities have hardship funds, too. You might also qualify for benefits.
What are the early energy price predictions for July?
Cornwall Insight has reported July shows more positive news, with the price expected to fall slightly to £1,756 a year for a typical dual fuel customer.
“The first two winters after Russia’s invasion of Ukraine were unusually mild, but this winter marked the return of typical cold conditions,” said Dr Craig Lowrey, principal consultant, Cornwall Insight.
“While the news that prices will rise will not be welcomed, the impact will be tempered by reductions in household energy use as we move into the summer months.”
Get a heat pump quote
Answer a few simple questions, and a trusted heat pump installer will be in touch with a bespoke quote for your home or business.
Early forecasts for July have seen a dip in the energy market, US and Russia talks on a potential end to the Ukraine war continue.
Although these talks have come too late to impact the April cap, there is already a decline in the July forecasts, albeit remaining hundreds of pounds above the pre-crisis summer cap levels.
However, Lowrey warns that given the high levels of volatility in the market and the ongoing consultations from Ofgem on the non-wholesale elements of the cap, it is extremely likely forecasts will change multiple times before the July cap is set in three months’ time.
He added: “The UK’s reliance on imported gas and the wholesale power market driven by marginal gas costs leaves it particularly vulnerable to fluctuations in the international wholesale market relative to those nations, which meet a greater share of energy demand for their own indigenous sources.”
As the UK continues to strive to meet its 2050 net zero goals, it is hoped this will reduce the need for imported energy and therefore lead to a greater stabilisation in energy bills. However, Lowrey said this process is expected to take years.
