Energy prices on the rise again.
Is Now the Time to Fix Your Energy Bill?
With energy prices set to rise once again in April, Ofgem, the UK's energy regulator, is urging households to consider switching to a fixed-price energy plan to protect against further increases.
From April 2025, the energy price cap will rise by 6.4%, meaning the average annual bill for a typical household will increase by £111, bringing it to £1,849 a year (around £9.25 more per month). This increase is part of Ofgem's quarterly adjustments to the price cap, which affects 22 million homes across England, Wales, and Scotland.
While Ofgem sets a limit on how much suppliers can charge per unit of gas and electricity, the total cost of a bill depends on the amount of energy a household uses. With rising wholesale energy prices and inflation driving the increase, Ofgem advises households to consider switching to a fixed tariff, which offers greater certainty for future payments and could potentially reduce overall costs.
How Will the Price Rise Impact Your Bill?
From April, the price cap for gas will rise to 6.99p per kilowatt-hour (kWh), while electricity will be capped at 27.03p per kWh. A typical household uses approximately 2,700 kWh of electricity and 11,500 kWh of gas per year. Standing charges are also expected to rise for gas, but decrease for electricity, with some customers seeing an overall increase of up to £20 a year, depending on their region.
Should You Fix Your Energy Tariff?
Many people are feeling the impact of rising energy costs, especially as they coincide with hikes in council tax and water bills. Ofgem's chief executive, Jonathan Brearley, has suggested that now is a good time to consider fixing your tariff to avoid unpredictable costs.
Martin Lewis, founder of Money Saving Expert, agrees, calling the move to a fixed deal a "no-brainer" for many households. He recommends checking whole-of-market comparison sites to find the best deal and suggests waiting for some energy companies to release new, competitive tariffs.
However, it’s important to remember that energy prices could fall later in the year, with analysts predicting a possible decrease in July 2025. As a result, Cornwall Insight forecasts that the price cap may drop to £1,756 annually for a typical household, although this will still be higher than pre-crisis levels.
What About Households in Debt?
Rising energy costs are particularly worrying for those already in debt to their suppliers. According to Citizens Advice, approximately 6.7 million households in England, Wales, and Scotland are in energy debt, totaling nearly £4 billion. For those struggling, Ofgem recommends getting in touch with their supplier to discuss options and seek help.
In response to these concerns, the government has extended the Warm Home Discount Scheme for the upcoming winter, which offers a £150 reduction on annual energy bills for eligible households on benefits.
Top Tips to Save on Energy Bills
As we approach the warmer months, here are a few expert tips to help keep energy consumption – and bills – down:
Lower your boiler temperature: If your hot water is too hot to wash your hands in, it's set too high. Lowering the temperature can reduce energy usage.
Manage draughts: Seal unused chimneys and other gaps where heat escapes to prevent unnecessary energy loss.
Shorten shower time: Limiting showers to four minutes can help reduce water and energy consumption.
