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Energy price cap: Why are gas and electricity bills going up and can I fix? | |
(6 days later) | |
Gas and electricity bills will increase again for millions of households on 1 April, when the latest energy price cap takes effect. | |
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 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 - variable tariff for a typical dual-fuel household which pays by direct debit. | |
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 will go up to £1,849 per year. | |
Those who pay their bills every three months by cash or cheque will pay £1,969. | |
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 day | Energy 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. |
What is happening to prepayment customers? | What is happening to prepayment customers? |
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 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 meters | Energy 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 gas and electricity supplies. They vary slightly by region, external. | |
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 | |
Some customers in London and the North Wales and Mersey region will see larger increases. | |
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, 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. | |
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 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 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 - 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 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, external | Ofgem: Help with bills, external |