Ofgem's 6.4% increase to the energy price cap took effect on 1 April 2025, raising the Direct Debit cap level for a typical dual fuel household from £1,738 to £1,849 a year, an increase of £1111. The regulator announced the change on 25 February 2025 for the period covering April to June 20251. Standing charges also changed on 1 April: they fall for most households, but regional variation remains, and some households will see a small increase of up to £20 per year for a typical dual fuel consumer1.
The cap level varies by payment method. Standard credit rises to £1,969, an increase of £118, and prepayment rises to £1,803, an increase of £1132. Ofgem said standard credit is the most expensive payment method under the cap, with those customers paying an additional £120 compared with Direct Debit2. For electricity-only customers on Economy 7 meters, the Direct Debit cap level rises from £1,150 to £1,201, an increase of £512.
On standing charges, Ofgem's summary states that electricity standing charges on average fall by 7.17p per day (12%) and gas standing charges broadly increase by 1.02p per day (3%) for a typical consumer, but that this varies considerably by region, with some regions seeing an increase driven by distribution network costs2. Ofgem attributed the regional differences to changes in network costs, the price paid to transport energy around the country1.
| 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 | £1,690 | £1,803 | £113 (6.7%) |
| Economy 7 (Direct Debit) | £1,150 | £1,201 | £51 (4.5%) |
Ofgem said a recent spike in wholesale prices was the main driver, accounting for around 78% of the total increase, with a small increase in policy costs and associated inflationary pressures making up a further 22%1. Its cost breakdown shows the wholesale allowance rising by £86, from £755 to £841, and the policy cost allowance rising by £11, from £187 to £1982.
"From 1 April, Britain's standing charges will reduce for most households, but some regional variation remains"
Ofgem also reported that 11 million people are now on a fixed deal and will not be affected by the change in the price cap, with four million customers having moved to a fixed tariff since its November 2024 announcement1. It said around 22 million domestic customers remain on Standard Variable Tariffs, of which around 13 million pay by Direct Debit1. Ofgem said there are fixed, Direct Debit tariffs tracking below the April price cap level, with savings of around £50 available compared with the upcoming cap level1.
Why it matters for households
The cap limits the maximum rate per unit and the daily standing charge that suppliers can bill on default tariffs, so a household's actual bill depends on how much energy it uses1. The split between unit rates and standing charges matters for energy independence in a practical sense: a standing charge is paid regardless of consumption, so a household that uses very little energy still carries a fixed daily cost. Ofgem's summary shows the average electricity standing charge falling while the gas standing charge broadly rises, with the net effect differing by region2. Ofgem is consulting on proposals to require all suppliers to offer a low or no standing charge tariff, which it says would offer consumers more choice and control over how they pay and may better suit low energy users1. The figures reflect the latest (2023) Typical Domestic Consumption Values: 2,700kWh for electricity, 11,500kWh for gas and 3,900kWh for multi-register meters such as Economy 72.
What happens next
Ofgem closed its debt standards and debt relief solution consultation on Thursday 6 February and is working through the responses, with the intent that any changes would be in place for next winter1. Its plans could see a Debt Relief Scheme established, which suppliers would use to either write off debt that is so significant it will never be paid back or help pay off debt by debt matching customer payments1. Ofgem said the scheme, alongside the government's proposed expansion of the Warm Home Discount, aims to reduce debt to levels seen before the energy crisis, reducing costs to all consumers by £25-30 per year1. Ofgem also extended the debt allowance in the price cap, as debts reached record levels of £3.8 billion1. The government is consulting on expanding the Warm Home Discount, which provides £150 off energy bills; IGEM reports the expansion could benefit 6.1 million households3.