The energy price cap has increased by 1.2% for the period of January to March 2025. The average household will pay the equivalent of £1,738 a year for gas and electricity. Customers on standard variable tariffs will continue to pay a monthly bill based on their usage, but the unit rates used to calculate the total and daily standing charge have been adjusted.
The January energy price cap for 2025 was confirmed by Ofgem on November 22nd 2024 and came in to effect on January 1st 2025.
New energy price cap January 2025
| Â | January Energy Price Cap 1 January to 31 March 2025 |
Previous Energy Price Cap 1 October to 31 December 2024 |
| Gas | Unit rates: 6.34p /kWh Standing charge: 31.65p /day |
Unit rates: 6.24p /kWh Standing charge: 31.66p /day |
| Electricity | Unit rates: 24.86p /kWh Standing charge: 60.97p /day |
Unit rates: 24.50p /kWh Standing charge: 60.99p /day |
Figures are rounded to two decimal places and are based on the average for customers in England, Scotland, and Wales who are paying by direct debit. Prices may vary by region and include VAT. Unit prices are given in pence per kilowatt hour.
How much will my energy bills be?
The average household on dual fuel (gas and electricity) paying by monthly direct debit will see their annual bill rise to £1,738 – that’s a 1.2% increase.
- For households that prepay their energy, average annual bills will increase by 1.3% to £1,690.
- Households who pay on receipt of bill will see the average annual costs increase by 1.2% to £1,851.
- Standing charges for both gas and electricity have remained almost the same – about £338 annually for direct debit customers.
Estimate your household energy bills with our Utility Bills Calculator
When is the next price cap announced?
Energy regulator Ofgem adjusts the Energy Price Cap every three months based on wholesale energy costs. The next price cap will be in place from April 1st 2025, and will likely be announced in late February.
Analysts predict another 2% increase on the January price cap, up to £1,777 a year for a typical dual-fuel household who pay by direct debit. Current predictions are that the July price cap will see a slight fall in prices, although longer-term projections are more difficult to be sure of.
You can easily protect your bills from price cap hikes by switching to a fixed-rate energy tariff. Speak to experts today
What is the energy price cap?
The energy price cap is the maximum energy providers can charge their customers on standard variable tariffs. While it’s expressed as an annual total for the average household, your tariff is actually a per-unit price and daily standing charge.
Your bill is then calculated based on the amount of energy you use. Therefore, if you use more energy than the average household your energy bill can be higher than the price cap.
Who sets the energy price cap?
The energy price cap is set by the UK’s energy regulator Ofgem. It provides average figures for unit rates and standing charges, as well as specific regional pricing.
How often does the energy price cap change?
The energy price cap is adjusted every three months, on the 1st of January, April, August and October. The new price cap figures are announced approximately five weeks before the cap comes into effect.
What were the predictions before the announcement?
Before the new price cap was announced, industry analyst Cornwall Insight had already published its prediction of a rise of around 1%. This would see the average energy bill for households go from £1,717 a year to £1,736, a rise of £19 or around £1.58 a month, which is a 10% rise from the October energy price cap. Earlier in 2024, experts predicted energy prices would fall in January, but now expect them to continue to trend upwards for the first half of 2025.
How can I protect myself from price cap hikes?
You can easily protect your bills from price cap hikes by switching to a fixed-rate energy tariff. Under these tariffs, your per-unit costs and standing charges are fixed for the duration of your contract. You’ll still be charged for the energy you use, and you won’t be affected by changes to the price cap.
If you’re looking for a quote for a tariff that will save you money on your energy bills, book a call with our Connections Experts today. Switching is free, simple and quick, and you can protect your energy prices in just a few minutes.
