Ofgem announced on 25 February 2025 that the energy price cap for a typical household using electricity and gas and paying by Direct Debit will rise by 6 per cent to £1,849 per year for the period 1 April to 30 June 20251. The regulator said this adds £9.25 a month to a typical household's bills, and is 9 per cent (£159) per year higher than the cap set for the same period in 2024, which was £1,6901. In the same announcement, Ofgem stated that the government has announced an extension to the Warm Home Discount Scheme1.
Under the new cap, a household on a standard variable (default) tariff paying by Direct Debit will pay on average 27.03 pence per kilowatt hour (kWh) for electricity, with a daily standing charge of 53.80 pence, and 6.99 pence per kWh for gas, with a daily standing charge of 32.67 pence1. These are averages across England, Scotland and Wales and include VAT1. Ofgem attributed the increase mainly to rising global wholesale prices, and said some people may see a reduction in their standing charges depending on the region in which they live1.
The regulator said it has recently opened an industry consultation on introducing a tariff without a standing charge, and has announced an extension of the debt allowance, which supports suppliers helping customers who have difficulty paying their bills1.
"The government has also announced an extension to the Warm Home Discount Scheme. Your energy supplier will take the amount off your bill automatically if you are eligible."
The announcement did not set out the value of the Warm Home Discount, the qualifying criteria, or the period covered by the extension. Those details have not been reported in the announcement1. The scheme is administered through suppliers, and eligibility rules determine who receives the automatic deduction; the eligibility criteria and the suppliers that take part and how payment is made are separate from the price cap itself.
| Item | 1 April to 30 June 2024 | 1 April to 30 June 2025 |
|---|---|---|
| Typical household, Direct Debit | £1,690 per year | £1,849 per year |
| Change | up 6 per cent, £159 (9 per cent) higher year on year | |
| Electricity unit rate | not given | 27.03 p/kWh |
| Electricity standing charge | not given | 53.80 p per day |
| Gas unit rate | not given | 6.99 p/kWh |
| Gas standing charge | not given | 32.67 p per day |
Why it matters for households
The price cap sets the maximum a supplier can charge for each unit of energy and the daily standing charge on a default tariff, so the April rise feeds directly into what a typical household pays1. A higher unit rate means the cost of every kilowatt hour used rises, which matters most for homes that use more energy, such as those that are poorly insulated or heated by gas. The standing charge is paid regardless of how much energy is used, so it affects a home's fixed costs even in low-use periods.
The Warm Home Discount works differently: it is a one-off deduction applied to the bill of an eligible household, taken off automatically by the supplier1. That makes it a direct reduction in the annual cost of energy for those who qualify, rather than a change to the rate paid per unit. Households that receive it may also want to understand how it compares with other support, including the Winter Fuel Payment and an energy social tariff, which operate on different rules.
For a home's energy independence, the practical effect is that the cost of grid-supplied gas and electricity rises from April while a targeted discount continues for eligible households. The cap does not control how much energy a home uses; it controls the price of each unit and the standing charge. Homes that generate or store their own energy reduce the number of units bought at the capped rate, which changes how much the cap affects the total bill.
What happens next
Ofgem said the levels for the period 1 July to 30 September 2025 will be published by 27 May 20251. The consultation on a tariff without a standing charge is open, and the extension of the debt allowance has been announced1. The value, eligibility rules and duration of the Warm Home Discount extension have not been reported in the announcement1.