Millions of households across the UK will see their energy bills rise by more than £100 a year from April as Ofgem introduces a new energy price cap. The increase, higher than expected, will put further strain on budgets at a time when families are already grappling with the rising cost of living.
The 6.4% rise means a typical household’s annual bill will increase by £111, bringing the average cost to £1,849 per year. This cap applies to 22 million homes across England, Wales, and Scotland, covering those on standard variable tariffs. While it limits the amount suppliers can charge per unit of energy, the total bill depends on usage, meaning many will feel the pinch even more acutely.
A Difficult Time for Households
The timing of the increase couldn’t be worse. With council tax and water bills also set to rise in April, many households will see a double hit to their finances. Though wages are increasing on average, for those struggling to make ends meet, the higher energy costs will add further pressure.
Jonathan Brearley, Ofgem’s chief executive, acknowledged that this latest price hike is “unwelcome” and urged customers to consider switching or fixing tariffs now where possible. “If anyone is worried about paying their bills, I would urge them to reach out to their supplier to ensure they are getting all available support,” he added.
Yet for many, options remain limited. Six million people in the UK are already in debt to their energy supplier, according to figures from Citizens Advice, with total energy debts nearing £4 billion. The charity has warned that rising costs will hit families with children particularly hard, with one in three already struggling to keep up with payments.
What’s Behind the Price Rise?
The latest increase is driven by rising wholesale energy costs and inflationary pressures, according to Ofgem. Despite stabilising from the record highs of 2022, when Russia’s invasion of Ukraine triggered a global energy crisis, prices remain around 50% higher than pre-Covid levels.
The UK government has announced plans to expand the Warm Home Discount Scheme, which provides a £150 reduction for certain low-income households. But many argue this will not be enough to offset the ongoing financial burden.
For those on pre-payment meters, who typically face higher energy costs, the average bill will now stand at £1,803 per year—slightly less than direct debit customers but still a substantial sum. Meanwhile, those paying bills every three months by cash or cheque will face the highest charges, with an average bill of £1,969 per year.
Calls for Long-Term Reform
The rising cost of energy has renewed discussions about long-term solutions to stabilise bills. Consumer groups have called on the government to increase investment in renewable energy and improve insulation in homes, reducing the UK’s reliance on gas. A recent analysis by the Energy and Climate Intelligence Unit found that better home insulation could save households up to £400 a year, yet progress remains slow. You can read more about the government’s energy efficiency initiatives on the UK Government’s official energy saving hub.
What Can Households Do?
While wholesale costs drive much of the increase, households still have some options to manage their bills:
- Check if you’re eligible for government support, such as the Warm Home Discount or Cold Weather Payments.
- Contact your energy provider if you’re struggling to pay—many offer repayment plans or hardship funds.
- Consider switching providers or exploring fixed-rate deals to lock in a lower rate.
- Improve home energy efficiency, such as using smart thermostats, better insulation, or switching to energy-efficient appliances.
With energy bills rises are expected in July when Ofgem updates the cap again, the hope is that wholesale energy costs will stabilise. Until then, many households will have no choice but to tighten their budgets further.
Have Your Say
Are rising energy costs affecting your household? How do you think the government should tackle the issue? Join the conversation in the comments below.
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