Energy prices continue to escalate in the UK, placing additional strain on households as they approach a new financial forecast. The energy regulator Ofgem has announced a forthcoming increase in the price cap, which will become effective April 1, 2025.
This brings the average dual fuel bill for those not on a fixed deal from its present rate of £1,738 annually to £1,849, translating to an approximate monthly increase of £9 per household. Notably, the price per kilowatt-hour for electricity will rise from 24.86p to 27.03p. For the 28 million households on standard variable tariffs (SVTs), this marks the third consecutive quarter of rising bills.
A contributing factor to this price hike is the increase in gas prices across Europe, linked to reduced levels of gas storage across the continent. The current price cap is £159 higher than the same period last year. While the cap is increasing, many people will still see lower bills in spring and summer due to reduced energy consumption during these seasons.
In other sectors, utility bills continue to climb. The average annual water and wastewater bill is projected to rise by £123, while broadband prices for several UK customers face a 6.4% hike due to mid-contract adjustments. Despite these increases, typical bills are still significantly lower compared to their peak during the energy crisis exacerbated by geopolitical events like Russia’s invasion of Ukraine in February 2022. Prior to this price shock, a standard annual bill was around £1,084.
For those on fixed tariffs, bills will remain unchanged during the contract period, as prices are locked for a set duration. It is important to note that the cap refers to the unit price for dual fuel bills, meaning actual bills could differ based on usage. Ofgem is currently examining potential changes to maintain price protection, including reviewing the permanent ban on acquisition-only tariffs, which were initially introduced to curb risky short-term discounts.
Amid this evolving energy landscape, the government and various energy suppliers offer several support measures for those struggling with payments. The Cold Weather Payment and grants from suppliers like British Gas are available to eligible customers to help manage energy debts. These grants can provide substantial support, sometimes reaching up to £2,000.
Households can also benefit from registering for the Priority Services Register (PSR), a free service aiding vulnerable persons such as the elderly or those with health issues. Through this service, registrants receive perks like advance warnings for power outages, free gas safety checks, and additional support if required. By engaging these services, households may find relief amid ongoing economic pressures tied to rising utility costs.
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