Ofgem has announced a 6.4% increase to the energy price cap starting 1 April 2025, raising the average annual household energy bill to £1,849 – up £111 from current rates.
This marks the third consecutive quarterly increase, driven primarily by rising wholesale gas prices across Europe and inflation.
Energy experts recommend consumers consider switching to fixed tariffs to save money on bills and avoid further increases in the future.
What is the new price cap?
On Tuesday, 25 February 2025, energy regulator Ofgem announced that the price cap on household energy bills will increase by 6.4% for the April to June 2025 period.
This increase exceeded analysts’ previous expectations, a more modest 5% increase.
The new cap will take effect from 1 April 2025 and will remain in place until 30 June 2025, until the next quarterly adjustment.
| Current Price Cap (January 1 – March 31, 2025) |
New Price Cap (April 1 – June 30, 2025) |
Change | |
|---|---|---|---|
| Gas | Unit rate: 6.34p per kWh Standing charge: 31.65p per day |
Unit rate: 6.99p per kWh Standing charge: 32.67p per day |
Unit rate: +10.3% Standing charge: +3.2% |
| Electricity | Unit rate: 24.86p per kWh Standing charge: 60.97p per day |
Unit rate: 27.03p per kWh Standing charge: 53.80p per day |
Unit rate: +8.7% Standing charge: -11.8% |
| Avg. annual bill | £1,738 | £1,849 | +£111 increase (+6.4%) |
How will the new price cap impact my bills?
The price cap increase will affect approximately 22 million households across England, Wales, and Scotland. Using Ofgem’s usage figures and new price cap unit rates, we have estimated the bill increase for households with low, medium and high energy usage:
- Low-usage households: energy bills will increase by around £60-70
- Medium-usage households: energy bills will increase by £100-120
- High-usage households: energy bills will increase by £160-170
Estimate your energy bills with our calculator
Find out how much your bills may change with our energy bill increase calculator. Simply input your current monthly energy bill figures and we will calculate how much you can expect your bills to be, under the new energy price cap.
Energy Bill Calculator
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This calculation is based on the January 2025 and April 2025 price cap figures. The calculator estimates your usage based on your current bills and then applies the new rates. Actual bills may vary based on your specific tariff, usage patterns, and regional variations.
Average energy bill changes for low, medium and high-usage households
Low usage households (7,500 kWh gas, 1,800 kWh electricity)
- Households with low energy usage (flat or 1 bedroom house with 1-2 people) should expect an annual energy bill of about £1,325 under the new price cap.
Medium usage households (11,500 kWh gas, 2,700 kWh electricity)
- Households with medium energy usage (2-3 bedroom homes with 2-3 people) should expect an annual energy bill of about £1,847 under the new price cap.
High usage households (17,000 kWh gas, 4,100 kWh electricity)
- Households with high energy usage (4+ bedroom homes with 4-5 people) should expect an annual energy bill of about £2,607 under the new price cap.
Your standing charges can be more or less the units shown above, depending on where you live. Some households may see additional increases of up to £20 per year due to these differences.
Why is the price cap going up?
According to Ofgem, approximately 78% of the total increase is attributable to rising wholesale gas prices across Europe.
The European benchmark prices have risen more than 95% over the past year. A particularly cold winter also depleted gas reserves more quickly than anticipated.
The remaining 22% of the increase is due to policy costs and associated inflationary pressures.
Energy Secretary, Ed Miliband described the increase as “worrying” and blamed Britain’s reliance on fossil fuels, particularly gas, stating that “markets that determine the price of those fossil fuels are controlled by the decisions of petrostates and dictators.”
When is the price cap announcement?
Ofgem will announce the next quarterly price cap adjustment in late May 2025, which will take effect from 1 July 2025.
Analysts at Cornwall Insight have forecast that prices could potentially fall in July, returning close to current levels.
What is the Energy Price Cap?
The energy price cap is a regulatory mechanism introduced by Ofgem to limit how much energy suppliers can charge consumers for each unit of gas and electricity they use.
It applies to households on standard variable tariffs in England, Scotland, and Wales.
What do experts say?
Jonathan Brearley, Ofgem’s chief executive, acknowledged that further increases would be “unwelcome” and advised customers to consider “switching or fixing tariffs now” for certainty and potential savings.
Money Saving Expert founder Martin Lewis described moving to a fixed deal as a “no-brainer” and also recommends that consumers check comparison sites for the best deals.
We recommend supplier Octopus Energy – they offer great value fixed rate tariffs and are also the top recommended supplier by consumer advice service ‘Which?’ for the last 8 years running. Boasting more awards than any other energy supplier, exceptional customer service and an all-green electricity mix, they’re our top pick for home energy supply.
For those struggling with energy costs, Ofgem encourages reaching out to suppliers for support. According to Citizens Advice, approximately 6.7 million people in England, Wales, and Scotland are currently in debt to their energy suppliers, with official figures showing nearly £4 billion owed.
The government has announced plans to extend eligibility for the Warm Home Discount scheme next winter, which provides almost 3 million more households with a £150 reduction on annual energy bills for qualifying households on benefits.
