We were very distressed to see that the Energy Price cap as set by Ofgem is to increase from 6.4% from 1st April 2025.
This means that anyone not on a fixed tariff will be paying more for their gas and electricity from 1st April until a new price cap start on 1st July 2025.
Here’s everything you need to know about the changes to the Energy Price Cap:
Why have energy prices increased?
Prolonged cold weather in Europe and the United States has pushed up demand for gas, which has pushed up prices.
Gas reserves in Europe have been depleted, meaning more needs to be imported, most likely from the United States.
Europe has also been steadily reducing the amount of cheap gas it imports from Russia, as a result of the ongoing conflict with Ukraine.
What should you do if you are worried about rising energy prices?
Check if you are on a Standard Variable Rate tariff or a Fixed Tarff. You can find this on your energy bill in the ‘About Your Tariff’ section. If you are on a variable rate tariff, call your supplier and ask to be put on a Fixed rate tariff.
If you are concerned about paying for your heating and energy bills, then we recommend that people contact their energy company in the first instance. They will be able to discuss any discounts you may be eligible for, as well as potential grants for insulation and other energy saving measures.
If your energy company is not able to help, you may want to contact a local Citizens Advice, or your local Council. Many areas also have a community energy group who can offer support, such as BHESCo in Brighton, Energise Sussex Coast in Hastings, and South East London Community Energy.
What can people do to reduce energy costs?
There are many small steps that people can take at home to bring down their ongoing energy costs.
Some examples include:
- setting a thermostat to 18 or 19 degrees
- turning off heating over night
- addressing any draughty windows or doors
For more tips on improving home energy efficiency, take a look at our guide.
What more can the UK Government do to bring down energy bills?
The UK needs a national campaign to upgrade insulation in the places we live and work.
In addition to upgrading energy efficiency, the UK must develop lots more homegrown renewable energy, such as solar and wind power. This will provide true energy independence and protect the UK from volatile international energy markets.
The electricity transmission network managed by National Grid must invest in upgrading capacity so that more renewable energy generation can be connected to the network.
Planning and connection permissions for new renewable energy projects must be made easier and quicker – there is currently a huge backlog of renewable energy projects waiting to be given the go ahead that could supercharge our journey to low-carbon energy.
We were encouraged by the ambitions set out in Labour’s Local Power Plan, we are now looking forwards to seeing some details and action to deliver these goals.
Who will pay for the UK energy upgrades?
We recognise that homeowners, landlords, and local Councils may not always have the funds available for insulation and renewable energy programmes.
Perhaps banks should be encouraged to provide no or low interest loans to people who want to develop low-carbon energy schemes, removing the financial obstacles that stop so many projects from happening.
Why North Sea oil and gas is not the answer to the UK's energy problems
It is sometimes suggested that the UK could bring down energy costs by extracting more oil and gas from the North Sea.
This is not true, because such extraction projects would be undertaken by private companies like BP or Shell, who would sell the oil and gas on international markets to whoever will pay the highest prices. Therefore, drilling North Sea oil and gas will do nothing to help UK energy prices, it will only contribute to the worsening climate crisis by adding more carbon emissions to the atmosphere.
2 Comments
Anonymous · 28/02/2025 at 17:54
I do not understand how a fixed rate tariff helps. Surely all customers end up paying the same sum eventually, but on a fixed rate we would pay over the odds when prices fall again? Or do the energy companies hike the price at the end of the period to get back the sums they lost during the fixed rate time? Any help gratefully received.
Dan Curtis · 10/03/2025 at 15:06
There are a few questions here to address. Firstly, if you are on a fixed rate, then your unit rate and standing charge are not affected when there is a change to Ofgem’s price cap. If the price cap increases, then you would be protected from that. However, as you suggest, if the price cap decreases, then you would not benefit from cheaper prices. However, Ofgem have already announced an increase to the price cap by 6.7% on 1/4/2025, and there is an expectation that this will increase again at the next review date of 1/07/2025.
In addition to being insulated from changes to the energy price cap, energy companies typically offer cheaper rates for customers who choose a fixed tariff. This does mean that a customer can expect their unit rate and standing charge to increase when their fixed tariff comes to an end and they revert to the Standard Variable Tariff. This is why, usually, it is a good idea to choose a fixed rate again.
Choosing the right tariff for your property depends on a number of factors, including annual consumption levels, if the property has a heat pump or solar panels, and how someone pays for their energy. But as a general rule, it is considered that choosing a fixed tariff will save households money, because the unit rates associated with a fixed tariff are typically lower than the Standard Variable Rate.