- The price cap currently stands at £1,717
- The average household will pay £1,738 or an extra £1.75 per month from January
- This is 10% cheaper compared to January-March 2024
The energy price cap will increase by 1.2% from January – March 2025, as announced by energy regulator Ofgem.
This equates to a £21 rise for an average household per year, or around £1.75 per month. For an average household paying by Direct Debit, this comes to £1,738 annually.
Despite the increase, this is 10% (£190) cheaper compared to January – March 2024, when the price cap was at £1,928, and a huge 57.2% less than during the energy crisis of January – March 2023, when the standing charge was at £2,321.
Tim Jarvis, director general of markets, Ofgem, said: “While today’s [22nd November 2024] change means the cap has remained relatively stable, we understand the cost of energy remains a challenge for too many households.
“However, with more tariffs coming into the market, there are ways for customers to bring their bill down so please shop around and look at all the options.”
According to Ofgem, around 1.5 million households switched tariff in the past three months in order to find the best deals to keep household bills down. In August, Ofgem called for suppliers to offer more choices in regards to low and no-standing charge tariffs. There are currently eight deals available that are at least 10% below the price cap level and savings of up to £140 are available when switching tariffs.
Jarvis continued: “In the short term though, anyone struggling with bills should speak to their supplier to make sure they’re getting the help they need and look around to make sure they’re on the best, most affordable deal for them.”
As well as switching tariffs, Ofgem is also encouraging customers to evaluate how they pay their bills. 5 million customers pay by standard credit payments, whereby they pay for energy after it’s been used. Over the winter in particular, this is much more expensive. Changing to Direct Debit or smart PPM could save £100.
Ofgem has urged people to look around and find the best deal for them, but warns that customers should be well-informed before making a decision. Despite a lower standing charge, deals come with a higher unit rate, meaning that they will benefit those with lower energy usage but could hinder those who use more energy.
For example, the cheapest deal on the market could save a typical dual fuel customer £210, but it requires signing up for an additional boiler cover service.
Jarvis added: “Our reliance on volatile international markets – which are affected by factors such as events in Russia and the Middle East – means the cost of energy will continue to fluctuate. So it’s more important than ever to stay focused on building a renewable, home-grown energy system to bring costs down and give households stability.”
How to save energy this winter?
For advice and guidance on how to save energy and reduce your energy bills this winter, take a look at our guides on:
