The average household will pay £1,849 a year
The energy price cap is going up, taking a typical bill to around £154 a month. Energy prices be at their highest since January-March last year.
Though they are well down on their 2022 peak, they’re still almost double what we’d pay pre-pandemic and pre-Ukraine invasion.
Here’s what you need to know about the cap and how much you’ll pay.
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How the energy cap works
The energy price cap is a limit set every three months by Ofgem, the government’s energy regulator. It restricts how much an energy company can charge customers.
The cap applies to the price of your gas and electricity on your energy company’s default or standard variable rates. These basically can go up and down whenever the energy company likes. With the cap, the energy companies have to make sure their tariffs aren’t higher than the set rate.
Despite how it looks, it’s not the most you can pay for your bills. Instead, the prices set on the cap are the maximum price per unit of energy you use. Ofgem announces the figure as an annual price, as you probably don’t have a clue how many kwh of energy your family uses.
The quoted “cap” (£1,849) is an annual price based on a typical household. If you use more energy, you’ll pay more than the cap every year. Use less and you’ll pay less.
There are separate caps for gas and electricity, and each cap is also made up of a standing charge (a set amount each day, regardless of whether you use any energy) and a usage charge.
The cap will also vary depending on where you live in the UK. Prepayment caps have always been a little higher, though that changed earlier this year. The new energy price cap also applies to those with a prepayment meter.
Crucially, if you’re on a fixed-rate deal the cap doesn’t apply and the price you pay won’t change until that fix ends.
What is the new energy price cap?
The latest announcement is rise to the price cap from 1 April until 30 June 2025.
The new cap for a “household with average use” is £1849 a year. This is up by about £11, or 6.4% from the current rate.
If you break it down to each actual unit cost, the average caps are:
| Energy price cap per unit and standing charge1 January to 31 March 2025 | Energy price cap per unit and standing charge1 April to 30 June 2025 | |
|---|---|---|
| Electricity | 24.86 pence per kWh 60.97 pence daily standing charge | 27.03 pence per kWh 53.80 pence daily standing charge |
| Gas | 6.34 pence per kWh 31.65 pence daily standing charge | 6.99 pence per kWh 32.67 pence daily standing charge |
This does vary based on where you live, though the Ofgem website has a full breakdown of the regional caps for all standing charges and units.
What is the new average monthly energy bill?
Despite Ofgem attempting to present the information in a way we understand, the total annual cap figure isn’t always the easiest to comprehend – especially since our energy use changes throughout the year but this cap only applies to three months,
At the same time, it’s not a flat increase to all bills as there could be different percentage changes to standing charges and unit rates.
So we think it’s easier to understand the price cap when you view it as a monthly direct debit. Your energy company calculates this by taking the predicted cost for a year based on your previous energy usage and dividing it by 12. It’s not 100% accurate, but it’s a handy comparison.
For the latest cap, the average monthly bill will be £154 which is £9 more every month than the current cap.
What is the current energy price cap?
The current price cap (1 January to 31 March) is £1,738 a year, based on the average household. This is with the new typical use figures.
When will the new prices start?
This new energy price cap will come into play on 1 April and will remain in place until 30 June.
How much will you pay under the new energy price cap?
Remember, the price cap figures are based on average use. If you use more than this average you’ll pay more, if you use less you’ll pay less. Plus, it can vary regionally so you’ll need to check where you live to see exactly what it’ll be for you.
If you want to get a rough quick idea, you can add 1.2% from what you pay at the moment (multiply your current monthly bill by 1.012). This doesn’t take into account the balance between unit and standing charges, or whether you’ve got an accurate direct debit set-up, but it could give you a sense.
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Will you pay more or less money with the new energy price cap?
If you’re on a variable tariff
Broadly, anyone on a standard tariff will be charged more per unit of energy from 1 April 2025. Of course, the bill itself will be based on your actual energy use.
If you’re on a prepayment meter
There is no longer a significant premium for those with prepayment meters. In fact, it’ll be slightly less at £1,803 on average for the year.
If you’re already on a fixed tariff
If you’re fixed onto a tariff, your prices usually don’t change when the price cap changes. That’s because you’ve already agreed on a price per unit of energy for a fixed length of time with your energy supplier, usually 12 months.
Should you fix your energy?
We’ve seen more fixed deals returning to the market since last summer. It’ll be worth checking them out to see if you’ll save.
You’ll be comparing prices based on the price cap now, rather than April’s one, so it’s likely most fixes will say you’ll pay more. But of course if you didn’t fix, you’d also be paying more from April on a variable rate deal.
If you go for one of these, bear in mind that some will charge an exit fee if you want to swap suppliers before the end of the term.
There are also some tariffs that track at below the cap, so you’ll always pay less – but not necessarily less than a fix.
Of course, these can change, so it’s worth using a comparison site to see what rates are available.
Will bills go up again?
The current predictions are that the price cap could fall slightly in July 2025 bringing bills down to £1,756 a year, but a lot can change in that time.
When is the next price cap change?
The price cap is reviewed every three months (though prior to October 2022 it was every six months).
The price cap will next change on 1 April 2025. After this, it’ll change again on 1 July 2025, a change that will be announced in May 2025.
Price cap announcements & changes
- Announcement by 26 May 2025 for 1 July 2025 change
- Announcement by 27 August 2025 for 1 October 2025 change
How you can reduce your bill
Paying by direct debit will reduce your bills, so it’s well worth doing this.
Otherwise, it’s hard to do much to reduce what you spend on energy other than by using less energy. The standing charges will still apply, and bills will still be sky-high, but cutting back on gas and electricity will mean you pay less.
It’s worth giving accurate meter readings if you’re not on a smart meter. This will mean you’re more likely to have an accurate direct debit on current use, rather than what you used last year, and stops you from falling into debt on your energy account. Your energy firm will probably not change this automatically, so you might need to ask.
Don’t forget a direct debit does average the spend out over the year so you should hope to overpay in the summer and underpay in the winter to help even out your bills.
How has the price cap changed?
As you can see, the really big changes have happened since October 2021. Before this the average direct debit was under £100, so even with this new cut, we’re still paying more, and even more on top if you had been saving with a lower fixed rate deal.
These are the energy price caps going back to 2019, we’ve roughly adjusted them for the new typical use figures. You can see the historical price caps with the old figures below.
| Date | Cost per year with new typical use figures | EPG & grants | Average monthly bill | Change (+/-) |
| April to June 2025 | £1,849 | £3,000 EPG | £154 | +6.4% |
| January to April 2025 | £1,738 | £3,000 EPG | £145 | +1.2% |
| October to December 2024 | £1,717 | £3,000 EPG | £143 | +9.5% |
| July to September 2024 | £1,568 | £3,000 EPG | £131 | -7.2% |
| April to June 2024 | £1,690 | £3,000 EPG | £141 | -12.34% |
| January to March 2024 | £1,928 | £3,000 EPG | £161 | +5.13% |
| October to December 2023 | £1,834 | £3,000 EPG | £153 | -7.95% |
| July to September 2023 | £1,992 | £3,000 EPG | £166 | -17.04% |
| April to June 2023 | £3,151 | £2,402 EPG | £200 | +50.33% |
| January to March 2023 | £4,110 | £2,402 EPG & £67/m grant | £133 | 0.00% |
| October to December 2022 | £3,409 | £2,402 EPG & £67/m grant | £133 | -15.62% |
| April to September 2022 | £1,893 | £158 | +54.35% | |
| October 2021 to March 2022 | £1,227 | £102 | +12.21% | |
| April to September 2021 | £1,093 | £91 | +9.21% | |
| October 2020 to March 2021 | £1,001 | £83 | -7.46% | |
| April to September 2020 | £1,082 | £90 | -4.50% | |
| October 2019 to March 2020 | £1,133 | £94 | -5.98% | |
| April to September 2019 | £1,205 | £100 | +10.29% | |
| January to March 2019 | £1,092 | £91 |
Historical energy price caps
These are the energy price caps from before the typical use figures changed. This change made it difficult for us to compare new caps with the old ones, so we’ve converted the old price caps into ones with the new typical figures above.
| Date | Max annual bill for a typical household | Average monthly direct debit | Change +/- |
| October to December 2023 | £1,923 price cap / (£3,000 EPG) | £160.25 | -7% |
| July to September 2023 | £2,074 price cap / (£3,000 EPG) | £173 | – 17% |
| April to June 2023 | £2,500 EPG / (£3,280 price cap) | £208 (£273.33 without EPG) | + 19% (-23.3%) |
| January to March 2023 | £2,100 (£2,500 EPG – £400 grant) / (£4,279 price cap) | £175 (£356.58 without EPG and grant) | + 0% (20.5%) |
| October to December 2022 | £2,100 (£2,500 EPG – £400 grant) / (£3,549 price cap) | £175 (£295.75 without EPG) | + 8%(+80%) |
| April to September 2022 | £1,971 price cap | £162.25 | +54% |
| October 2021 to March 2022 | £1,277 price cap | £106.42 | +12% |
| April to September 2021 | £1,138 price cap | £94.83 | +9% |
| October 2020 to March 2021 | £1,042 price cap | £86.83 | -7.5% |
| April to September 2020 | £1,126 price cap | £93.83 | -4.5% |
| October 2019 to March 2020 | £1,179 price cap | £98.25 | -6% |
| April to September 2019 | £1,254 price cap | £104.50 | +10.2% |
| January to March 2019 | £1,137 price cap | £94.75 |
My Octopus monthly bill is 300 GBP per month but I am quadruple glazed and with French doors all at top U values 4 bed detached home. I am not sure why.
I am with Octopus. I have a quadruple glazed house throughout (Finnish windows with the lowest U values). I have Huet (JH Industries) ISADEX Climat front doors from France, the best noise fire and heat insulating doors in Europe. I have two doors to the garden both double glazed. My boiler is traditional so I have a tank above in the attic and so on (not combi). I put the boiler (it is a 2009 Worcester Bosch) in the attic. My attic is completely insulated with thick fibre glass insulation. There are no holes to the outside in the house. It is a detached four bedroom house with cavity wall. I made all these changes in my detached home not to hear a neighbour’s dog. Why are my gas and electric bills consistently 300 GBP per month. Can you help me? you have my email. I would appreciate your advice.
I’m not interested what the average bill will be. I want to know what I will pay. I need to know the price per therm and price per unit of gas
I should add that I paid no exit fees. The exit fees for the new fix are very hefty, but waived if I stay with the same supplier.
If you fix around October/November, the prices are likely to reflect the predicted January increase. If you are already on a fix, you are likely to get a good offer, though there have already been substantial increases since I fixed at the beginning of August. For existing customers on the price cap with my supplier, the offers are truly horrendous. 3 or 4 times higher than my offer, so this probably only works for those already on fixes.
Again I stress, I am only giving my experience, not advice.
Andy. I’m trying to understand how the price cap works for a medium / high user of gas and electric. My supplier just failed and I’ll be moving onto a SVR soon. I’m a high user of gas so will there be no benefit to me from the cap ?
Thanks
Andy, My current tarrif ends on 15th November. Should I opt to switch before 1st October or make the most of the 1
Month’s deal?
Hi Daniel, it’s hard to say but you will need to take into account any exit fees (though these are waived 49 days before your tariff ends). I’d expect the new rates to be so much higher that you’d save the difference by switching before.
Don’t know if this helps. My fix was due to end on October 31 this year. My DD was down to £45. per month. I checked the latest figure for an new fix offered to me by my supplier and it came to less than £2000 a year, so I came off the old fix at the beginning of August and took it. It’s a 2 year fix. I’m now paying £148 a month and it should average £163 based on my current annual usage. I’m paying more than £100 a month more between now and the end of October than I would have done on the old fix. The new unit prices I am paying are slightly higher than the October price cap, so if I am paying less than £2000, I must be using a lot less energy than average.
Where do I gain in all this? Hopefully from January 2023 onwards, when my costs will remain fixed and I won’t pay the new increases. I will need to save a bit over £300 to break even, but from current predictions, this shouldn’t be difficult and I’ll go on to gain. I noticed that that the latest offers on fixes from my supplier have already gone up by £70 per month since I fixed.
This is just my experience and guessing and not advice, as it’s a bit like gambling on the futures’ market, but I hope it helps.