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| Version 137 | Version 138 |
|---|---|
| Energy price cap: What next for gas and electricity bills and can I fix? | |
| (about 2 months later) | |
| Published6 August 2021 | |
| Gas and electricity bills will fall in July, when a new price cap takes effect. | |
| It will more than reverse the increase for millions of households on 1 April under the current cap. | |
| The annual bill for a household using a typical amount of gas and electricity rose to £1,849 per year, an increase of £111, in April. | |
| But it will drop to £1,720 in July, back down by £129 a year. | |
| The energy price cap sets the maximum amount customers can be charged for each unit of energy, but actual bills depend on how much gas and electricity you use. | The energy price cap sets the maximum amount customers can be charged for each unit of energy, but actual bills depend on how much gas and electricity you use. |
| What is the energy price cap and how is it changing? | What is the energy price cap and how is it changing? |
| The energy price cap covers around 21 million households in England, Wales and Scotland and is set every three months, external by Ofgem. | |
| It fixes the maximum price that can be charged for each unit of energy on a standard - or default - variable tariff for a typical dual-fuel household which pays by direct debit. | It fixes the maximum price that can be charged for each unit of energy on a standard - or default - variable tariff for a typical dual-fuel household which pays by direct debit. |
| Between 1 April and 30 June 2025, gas prices are capped at 6.99p per kilowatt hour (kWh), and electricity at 27.03p per kWh, external. | |
| This means the annual bill for a dual-fuel direct debit household using a typical amount of energy is £1,849 per year. | This means the annual bill for a dual-fuel direct debit household using a typical amount of energy is £1,849 per year. |
| However, from 1 July, the next cap will mean this annual bill will fall to £1,720. | |
| Between 1 July and 30 September 2025, gas prices will be capped at 6.33p per kilowatt hour (kWh) and electricity at 25.73p per kWh. | |
| Those who pay their bills every three months by cash or cheque pay more, but those on prepayment meters pay a little less. | |
| The cap does not apply in Northern Ireland, which has its own energy market. | The cap does not apply in Northern Ireland, which has its own energy market. |
| What is a typical household? | What is a typical household? |
| Your energy bill depends on the overall amount of gas and electricity you use, and how you pay for it. | Your energy bill depends on the overall amount of gas and electricity you use, and how you pay for it. |
| The type of property you live in, how energy efficient it is, how many people live there and the weather all make a difference. | The type of property you live in, how energy efficient it is, how many people live there and the weather all make a difference. |
| The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit. | The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit. |
| The vast majority of people pay their bill this way to help spread payments across the year. Those who pay every three months by cash or cheque are charged more. | The vast majority of people pay their bill this way to help spread payments across the year. Those who pay every three months by cash or cheque are charged more. |
| Should I take a meter reading when the energy cap changes? | Should I take a meter reading when the energy cap changes? |
| Submitting a meter reading when the cap changes means you will not be charged for estimated usage at the wrong rate. | Submitting a meter reading when the cap changes means you will not be charged for estimated usage at the wrong rate. |
| This is especially important when prices go up. | This is especially important when prices go up. |
| Customers with working smart meters do not need to submit a reading as their bill is calculated automatically. | Customers with working smart meters do not need to submit a reading as their bill is calculated automatically. |
| What is happening to prepayment customers? | What is happening to prepayment customers? |
| Between April and June, households on prepayment meters are paying slightly less than those on direct debit, with a typical bill of £1,803, a rise of £113 from the previous quarter. | Between April and June, households on prepayment meters are paying slightly less than those on direct debit, with a typical bill of £1,803, a rise of £113 from the previous quarter. |
| About four million households had prepayment meters in January 2025, according to Ofgem. | About four million households had prepayment meters in January 2025, according to Ofgem. |
| In July, households on pre-payment meters will pay slightly less than those on direct debit, with a typical annual bill of £1,672. | |
| Many have been in place for years, but some were installed more recently after customers struggled to pay higher bills. | Many have been in place for years, but some were installed more recently after customers struggled to pay higher bills. |
| Rules introduced in November 2023, external mean suppliers must give customers more opportunity to clear their debts before switching them to a meter. They cannot be installed at all in certain households. | Rules introduced in November 2023, external mean suppliers must give customers more opportunity to clear their debts before switching them to a meter. They cannot be installed at all in certain households. |
| Households who pay their bills by cash or cheque will pay more, with a typical annual bill of £1,855 | |
| Can I fix my energy prices? | |
| Fixed-price deals are not affected by the energy price cap, which changes every three months and can go up or down. | |
| They offer certainty for a set period - often a year, or longer - but if energy prices drop when you are on the deal, you could be stuck at a higher price. You may also have to pay a penalty to leave a fixed deal early. | |
| Ofgem, the energy regulator, says customers who want the security of knowing what their bill will be should consider moving to a fixed deal. However, it says they should make sure they understand all the costs. | |
| Martin Lewis, founder of Money Saving Expert, recommends checking whole-of-market energy price comparison sites to help find the best deal. | |
| What are standing charges and how are they changing? | What are standing charges and how are they changing? |
| Standing charges are a fixed daily fee to cover the costs of connecting to gas and electricity supplies. They vary slightly by region, external. | Standing charges are a fixed daily fee to cover the costs of connecting to gas and electricity supplies. They vary slightly by region, external. |
| On 1 April, the average electricity standing charge fell from 60.97p to 53.8p but the average gas standing charge increased from 31.65p to 32.67p | On 1 April, the average electricity standing charge fell from 60.97p to 53.8p but the average gas standing charge increased from 31.65p to 32.67p |
| Some customers in London and the North Wales and Mersey region saw larger increases. | Some customers in London and the North Wales and Mersey region saw larger increases. |
| Standing charges will typically fall to 51.37p a day for electricity and to 29.82p a day for gas in July. | |
| Campaigners argue standing charges are unfair because they make up a bigger proportion of the bill of low energy users. | Campaigners argue standing charges are unfair because they make up a bigger proportion of the bill of low energy users. |
| In response, Ofgem has said that energy firms must provide a choice of price-capped tariffs from winter 2025. | In response, Ofgem has said that energy firms must provide a choice of price-capped tariffs from winter 2025. |
| One would have a standing charge and unit rate - as is the case now - and another no standing charge but a higher unit rate. However, the proposals have been criticised as being too complicated. | One would have a standing charge and unit rate - as is the case now - and another no standing charge but a higher unit rate. However, the proposals have been criticised as being too complicated. |
| What help can I get with energy bills? | What help can I get with energy bills? |
| The Household Support Fund, external, which was introduced in September 2021 to help vulnerable customers, has been extended until March 2026. | |
| The Warm Home Discount scheme, external continues to offer a discount to eligible pensioners and low income households. | The Warm Home Discount scheme, external continues to offer a discount to eligible pensioners and low income households. |
| The government's Fuel Direct Scheme, external can help people to repay an energy debt directly from their benefit payments. | The government's Fuel Direct Scheme, external can help people to repay an energy debt directly from their benefit payments. |
| In addition, suppliers must offer customers affordable payment plans or repayment holidays if they are struggling with bills. | In addition, suppliers must offer customers affordable payment plans or repayment holidays if they are struggling with bills. |
| Most suppliers also offer hardship grants. | Most suppliers also offer hardship grants. |
| Changes to the winter fuel payment mean more than 10 million pensioners have not received the money this winter. | Changes to the winter fuel payment mean more than 10 million pensioners have not received the money this winter. |
| Ofgem: Help with bills, external | Ofgem: Help with bills, external |
| Ofgem: Help with bills, external | Ofgem: Help with bills, external |
| Related topics | Related topics |
| Money | |
| Ofgem | Ofgem |
| Personal finance | Personal finance |
| Energy industry | Energy industry |
| Personal debt | |
| Cost of Living | Cost of Living |
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