The UK is facing yet another increase in energy costs as the regulator Ofgem has announced the Energy Price Cap will rise from £1,738 to £1,849 starting April 1, 2025. This means typical households will see their annual bills rise by £111, bringing additional pressure on family finances amid already rising living costs.
This will be the third consecutive increase, following previous adjustments of 1% and 10% over the last year. According to Ofgem, the new cap is set to last three months and will cover bills for gas and electricity used by consumers paying via direct debit.
Money saving expert Martin Lewis quickly responded to the news, urging households to switch to fixed tariffs now to safeguard their finances for the year. "Energy Price Cap to rise again, 6.4% on April 1. This follows the 1% rise in Jan and 10% last Oct," he posted on X, emphasizing the importance of securing rates before they climb higher.
Lewis reiterated the uncertainty surrounding energy costs, noting, "If you're not on a fix or special deal you are likely on the cap. The Price Cap is a pants cap. Get off it if you can - fix now if you haven't already." This sentiment echoes the concerns of many as around 80% of UK households currently are affected by these regular price cap adjustments, with many rolling off fixed tariffs and landing on the more variable cap rates.
Despite the rise, there are ways consumers can manage their energy usage to mitigate the financial impact. Ofgem suggests keeping track of energy consumption since it determines the price cap calculations. The average household consumes about 2,700 kWh of electricity and 11,500 kWh of gas per annum, presenting many opportunities for savings for those who overconsume.
With spring approaching and heating needs likely reducing, now is the time for households to monitor usage more closely. Simple actions like turning lights off when not in use, limiting washing loads, and adjusting the heating settings can play significant roles in reducing monthly bills.
Talking with energy suppliers is also recommended. Households should reach out to their providers if bills become unmanageable. Under Ofgem rules, energy suppliers have obligations to support their customers, including offering payment plan reviews, reductions, or accessing hardship funds.
Elise Melville, energy expert at uSwitch.com, highlights the importance of switching stating, "If you haven't switched energy lately, you are likely to be already paying over the odds, and the coming price hikes will only make things worse. Any deal priced at, or below, the current cap level is likely to save you money over the coming year." She adds, "Your cheapest fix depends on where you live and how much you use, so do a comparison, though I'd wait to check this afternoon as more tariffs may be launched."
For those struggling financially, multiple support plans exist. Many energy companies now offer grants up to £2,000 for those eligible and financial aid is available through various charities dedicated to assisting households with energy debts.
Providers such as British Gas, EDF, and others have practical support mechanisms set up for both customers and non-customers. The situation requires as many households as possible to engage with their suppliers and explore options available to them.
These elements come together to form the comprehensive advice important for UK households facing rising energy costs. With the swift changes set for April, now is the time for families to assess their energy strategies, reach out for assistance, and switch tariffs to achieve cost-effective energy management.