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What is the energy price cap and how are gas and electricity bills changing? Energy price cap: Why are gas and electricity bills going up and can I fix?
(6 days later)
Gas and electricity bills went up again on 1 January, when the latest energy price cap took effect. Gas and electricity bills will increase again for millions of households on 1 April, when the latest energy price cap takes effect.
Further increases are expected later in the year, although not to the levels seen in recent years. The annual bill for a household using a typical amount of gas and electricity will go up to £1,849 per year, an increase of £111.
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.
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 before April. However, it says they should make sure they understand all the costs.
Martin Lewis, founder of Money Saving Expert, told the BBC that the level of fixed deals currently on offer means that switching is a "no-brainer".
He recommends checking whole-of-market energy price comparison sites to help find the best deal. Customers should also consider waiting a little while as some "good tariffs are being launched", Mr Lewis said.
However, analysts at consultancy Cornwall Insight who monitor the energy market have predicted that the cap could fall back again in July, to close to the current level.
Ofgem says around four million customers have moved to a fixed tariff since the last price cap announcement, in November 2024.
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 26 million households in England, Wales and Scotland and is set every three months, external by the energy regulator Ofgem. The energy price cap covers around 22 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 - 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 January and 31 March 2025, gas prices will be capped at 6.34p per kilowatt hour (kWh), and electricity at 24.86 per kWh., external Between 1 April and 30 June 2025, gas prices will be 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 went up to £1,738 per year, an increase of £21 from the previous cap. This means the annual bill for a dual-fuel direct debit household using a typical amount of energy will go up to £1,849 per year.
Those who pay their bills every three months by cash or cheque will pay £1,851. Those who pay their bills every three months by cash or cheque will pay £1,969.
The official energy price cap level is revised every three months, with the next change due in April.
Analysts at forecaster Cornwall Insight, which tracks the energy market, expect prices to rise by a further 5% in April, meaning a household using a typical amount of gas and electricity would pay £1,823 a year.
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.
Energy prices could vary at different times of dayEnergy prices could vary at different times of day
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.
Can I fix my energy tariff?
Fixed-priced deals offer certainty for a set period - often a year, or longer - but if prices drop, you could be stuck at a higher price.
Ofgem says customers who want the security of a set price should consider fixed deals.
However, it recommends getting independent advice.
The price comparison site Uswitch says it is important to check whether fixed deals have exit fees before signing up and to make sure you fully understand the terms of the contract.
Because the price cap changes every three months, it is difficult to know with any certainty whether a fixed tariff is a good deal. The longer the fixed term, the greater the uncertainty.
What is happening to prepayment customers?What is happening to prepayment customers?
Between January and March, households on prepayment meters will pay slightly less than those on direct debit, with a typical bill of £1,690, a rise of £21 from the previous quarter. Between April and June, households on prepayment meters will pay 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 April 2024, according to Ofgem. About four million households had prepayment meters in January 2025, according to Ofgem.
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.
Energy firms pay out over force-fitting of metersEnergy firms pay out over force-fitting of meters
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 a supply. They are typically 61p a day for electricity and 32p a day for gas, although they vary slightly by region. Standing charges are a fixed daily fee to cover the costs of connecting to gas and electricity supplies. They vary slightly by region, external.
Under the energy price cap, they have risen by 43% since 2019. From April the average electricity standing charge will fall from 60.97p to 53.8p but the average gas charge will increase from 31.65p to 32.67p
Campaigners argue standing charges are unfair because they make up a larger proportion of the bill of low energy users. Some customers in London and the North Wales and Mersey region will see larger increases.
Ofgem has proposed that energy firms must provide a choice of price-capped tariffs from winter 2025, one which has a standing charge and unit rate - as is the case now - and another with no standing charge but a higher unit rate. Campaigners argue standing charges are unfair because they make up a bigger proportion of the bill of low energy users.
Customers would be able to choose which suits them best, but there has been criticism over the proposals. In response, Ofgem has said that energy firms must provide a choice of price-capped tariffs from winter 2025, one which has a standing charge and unit rate - as is the case now - and another with no standing charge but a higher unit rate.
Separately, it wants a consistent approach from suppliers on how to deal with unpaid bills totalling £3.8bn. Customers would be able to choose which suits them best, but the proposals have been criticised by some charities and suppliers for being too complicated.
Separately, Ofgem also wants a consistent approach from suppliers on how to deal with unpaid bills totalling £3.8bn.
What is happening to the winter fuel payment?What is happening to the winter fuel payment?
Changes to the winter fuel payment mean more than 10 million pensioners are not receiving the money this winter. Changes to the winter fuel payment mean more than 10 million pensioners have not received the money this winter.
Previously, it was paid to all pensioners in England and Wales born before 25 September 1957.Previously, it was paid to all pensioners in England and Wales born before 25 September 1957.
However, in July, the government said future payments would be made only to those on low incomes who received certain benefits, including pension credit. However, in July 2024, the government said future payments would be made only to those on low incomes who received certain benefits, including pension credit.
The 2024 payment - worth £200 or £300 depending on individual circumstances - is paid automatically to eligible pensioners. The 2024 payment - worth £200 or £300 depending on individual circumstances - was paid automatically to eligible pensioners.
However, hundreds of thousands of people who are entitled to pension credit do not claim it, which means they will miss out on the winter fuel payment too. However, hundreds of thousands of people who are entitled to pension credit do not claim it, which means they also missed out on the winter fuel payment.
How much is the winter fuel payment and who can still get it?How much is the winter fuel payment and who can still get it?
What other help can I get with energy bills?What other 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 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.
What can I do if I can't pay my energy bill?What can I do if I can't pay my energy bill?
Ofgem: Help with bills, externalOfgem: Help with bills, external