Ofgem announced on 25 February 2025 that the energy price cap will rise by 6.4 per cent for the period covering April to June 20251. For an average household paying by Direct Debit for dual fuel, the cap equates to £1,849 per year, an increase of £111, or around £9.25 a month, over the three-month period1. Ofgem said a recent spike in wholesale prices is the main driver, accounting for around 78 per cent of the total increase, with a small increase in policy costs and associated inflationary pressures making up a further 22 per cent1.
The new level is 9.4 per cent (£159) higher than the same period last year (£1,690), but £531 (22 per cent) lower than at the height of the energy crisis at the start of 2023, when the Energy Price Guarantee was in place1. Ofgem's summary of changes gives the Direct Debit cap rising from £1,738 to £1,849, a 6.4 per cent increase on the January to March 2025 level2. The wholesale cost allowance within the cap rose by £86 (11 per cent), from £755 to £841, which Ofgem attributes to higher gas prices, below average temperatures across Europe this winter, and the loss of Russian pipeline gas imports into Europe via Ukraine from the beginning of 20252.
Rates by payment method, for a typical dual fuel customer2:
| Payment method | January to March 2025 | April to June 2025 | Change |
|---|---|---|---|
| Direct Debit | £1,738 | £1,849 | £111 (6.4%) |
| Standard Credit | £1,851 | £1,969 | £118 (6.4%) |
| Prepayment meter | £1,690 | £1,803 | £113 (6.7%) |
| Economy 7 (Direct Debit) | £1,150 | £1,201 | £51 (4.5%) |
Ofgem's separate news notice states the rise as 6 per cent to £1,849 per year, adding £9.25 a month for a typical household3. Its press release gives 6.4 per cent1. On unit rates, Ofgem says a Direct Debit standard variable customer will pay on average 27.03 pence per kilowatt hour for electricity with a daily standing charge of 53.80 pence, and 6.99 pence per kilowatt hour for gas with a daily standing charge of 32.67 pence, averaged across England, Scotland and Wales and including VAT3. Standing charges will reduce for most households from 1 April, but some regional variation remains, and some households will see a small increase of up to £20 per year for a typical dual fuel consumer1. Ofgem's summary states electricity standing charges on average fall by 7.17p per day (12 per cent) and gas standing charges broadly increase by 1.02p per day (3 per cent)2.
Ofgem chief executive Jonathan Brearley said:
"We know that no price rise is ever welcome, and that the cost of energy remains a huge challenge for many households."
Ofgem said 11 million people are now on a fixed deal and will not be affected by the change, with four million customers having moved to a fixed tariff since its last announcement in November 20241. Around 22 million domestic customers remain on standard variable tariffs, of which around 13 million pay by Direct Debit, around 5 million by standard credit and around 4 million by prepayment meter1. Ofgem said there are fixed, Direct Debit tariffs tracking below the April price cap level, with savings of around £50 available compared to the upcoming cap level1.
Alongside the cap, the government said it is consulting on expanding the Warm Home Discount, giving eligible households £150 off their energy bills, which would bring around 2.7 million more households into the scheme and push the total receiving the discount next winter to an estimated 6.1 million4. The consultation proposes removing the high-cost-to-heat threshold in England and Wales for winter 2025 to 2026 and increasing the level of spend available in Scotland for suppliers to allocate through the Broader Group, so that all households in receipt of means-tested benefits would be eligible for the £150 electricity bill rebate4. Energy Secretary Ed Miliband said:
"This is worrying news for many families."
Ofgem also announced an extension of the debt allowance, which supports suppliers helping customers who have difficulty paying their bills, as debts reached record levels of £3.8 billion1. Its consultation on establishing a debt relief scheme closed on Thursday 6 February, and Ofgem said it is working through the responses, with the intent that any changes would be in place for next winter4. Ofgem estimates the plans could reduce costs to all consumers by £25 to £30 per year1.
National Energy Action said the announcement marks a third successive increase, and published YouGov polling of 2,266 adults in Great Britain, carried out between 15 and 16 January 2025, finding that 49 per cent expect to ration their energy in the coming months and only 42 per cent said they had been able to comfortably afford their heating bill in the last three months5. The Energy and Climate Intelligence Unit said its analysis found wholesale costs driven up by gas prices will have added £3,000 by this autumn, equivalent to an average of £750 a year per household, more than seven times the cost of schemes that support renewables6. The End Fuel Poverty Coalition said the increase mirrors a trend line of gas prices since July 2024, and cited electricity prices being set by the cost of gas under marginal pricing rules7. Energy UK, publishing before the announcement, said the rise was overwhelmingly caused by wholesale costs, primarily gas, and that this would be the third consecutive rise8.
Why it matters for households
The cap does not set a maximum bill. It caps the unit rate and daily standing charge a supplier can charge on a default tariff, so what a household pays depends on how much energy it uses, where it lives and the meter it has3. A household using more than the typical 2,700 kWh of electricity and 11,500 kWh of gas will pay more than £1,849; one using less will pay less2. The rise takes effect for energy used from 1 April to 30 June 2025, and the level is reviewed every three months3.
For a home's energy independence, the figures show how much of the bill is set outside the household's control. Wholesale costs, the largest single component at £841 of the £1,849 Direct Debit cap, are driven by international gas markets2. Ofgem's own summary links the increase to European storage levels, winter temperatures and the end of Russian pipeline flows through Ukraine2. Households on fixed tariffs are insulated from this cap period's change, and Ofgem reports 11 million customers on such deals1. Those on standard variable tariffs, around 22 million, carry the change directly1. Standing charges, which are paid regardless of how much energy is used, fall on average for electricity and rise slightly for gas, with regional variation2. The debt allowance within the cap exists because unpaid debt is recovered through bills paid by all customers, which is why Ofgem frames debt reduction as a route to lower costs for everyone1.
What happens next
The government's consultation on expanding the Warm Home Discount is open, with proposals covering winter 2025 to 20264. Ofgem is working through responses to its debt standards and debt relief consultation, which closed on 6 February, with the intent that any changes would be in place for next winter1. Ofgem is also consulting on requiring all suppliers to offer a low or no standing charge tariff1. The next price cap levels, for 1 July to 30 September 2025, will be published by 27 May 20253.
Sources8 cited
- Energy price cap will rise by 6.4% from April | Ofgem, ofgem.gov.uk
- Summary of changes to energy price cap 1 April to 30 June 2025, ofgem.gov.uk
- Changes to energy price cap between 1 April and 30 June 2025 | Ofgem, ofgem.gov.uk
- Extra energy bill support for the country - GOV.UK, gov.uk
- Nearly half of adults expect to ration energy in coming months as average bills set to rise by over £100 - National Energy Action (NEA), nea.org.uk
- Energy & Climate Intelligence Unit | Energy price cap analysis: gas…, eciu.net
- Role of gas in the spotlight as energy prices set to rise - End Fuel Poverty Coalition, endfuelpoverty.org.uk
- Energy UK Explains: April 2025 price cap rise - Energy UK, energy-uk.org.uk