Ofgem announces increase to energy price cap from January
The energy price cap is the maximum amount energy suppliers can charge you for each unit of energy you use. It’s updated every three months by energy regulator Ofgem, to make sure that prices reflect changes in underlying energy costs, as well as inflation.
The price cap will increase to £1,738 for the period 1 January to 31 March 2025. Today’s announcement means the average annual energy bill is set to rise by 1.2%, or £21, for the period January to March 2025.
But this is the average a ‘typical’ household will pay. Ofgem estimates a typical or ‘medium-use household’ as those living in a 2-3 bedroom house with 2 or 3 people. The amount you pay will depend on how much energy you use, and where you live, as well as how you pay your energy bills.
You can check the average UK energy bill for different property types and EPC ratings.
Does the energy price cap affect me?
If you’re on a fixed tariff for your energy supply, there’ll be no change to how much you pay.
The energy price cap is only applied if you’re on a default energy, or standard variable, tariff. This includes those who pay by direct debit, standard credit, prepayment meter, or who have an Economy 7 (E7) meter.
From 1 October 2023, changes were made to how the discount is paid for homes that have pre-payment meters installed. Instead of being delivered as a discount to unit rates, a discount will be applied to the standing charge.
If you pay by direct debit, your energy bills are usually based on an estimate of how much you use. So if you’re in credit, it’s worth doing a meter reading and getting in touch with your supplier to check you’re still paying the right amount.
Energy price cap by payment type: January to March 2025
| Direct Debit | Prepayment | Standard Credit | Economy 7* | |
|---|---|---|---|---|
| Oct – Dec 2024 cap | £1,717 | £1,669 | £1,829 | £1,131 |
| Jan – Mar 2025 cap | £1,738 | £1,690 | £1,851 | £1,150 |
| £ change | +£21 | +£21 | +£22 | +£19 |
| % change | +1.2% | +1.3% | +1.2% | +1.7% |
Source: Ofgem. *Electricity-only tariff.
READ MORE: Find out how the Energy Price Cap is set
What does a 1.2% higher energy bill look like?
Our analysis shows that homes with higher energy ratings have lower energy bills, on average. Based on the upcoming price cap increase, this is likely to mean an extra £7 on average for A-rated homes annually, rising to an extra £77 for G-rated homes. D-rated homes, which is the current average EPC rating, are likely to see a £31 increase on average.
Our energy bill tracker analyses the EPCs of homes recently listed for sale, and what an annual energy bill could look like based on property type, and EPC rating. Take a look at how much a 10% increase to the current price cap could end up adding to your bill.
Rightmove’s energy bill tracker – Average increase to energy bills from October 2024
| Property type | EPC rating A | EPC rating B | EPC rating C | EPC rating D | EPC rating E | EPC rating F | EPC rating G |
|---|---|---|---|---|---|---|---|
| 1-bed flat | +£7 | +£10 | +£15 | +£21 | +£27 | +£34 | +£46 |
| 2-bed flat | +£7 | +£11 | +£16 | +£24 | +£33 | +£43 | +£52 |
| 3-bed terraced house | +£6 | +£13 | +£20 | +£28 | +£38 | +£51 | +£63 |
| 3-bed semi-detached house | +£6 | +£12 | +£20 | +£28 | +£39 | +£52 | +£64 |
| 3-bed detached house | +£6 | +£13 | +£21 | +£30 | +£43 | +£57 | +£78 |
| 4-bed semi-detached house | +£7 | +£15 | +£25 | +£35 | +£50 | +£68 | +£91 |
| 4-bed detached house | +£7 | +£16 | +£27 | +£37 | +£53 | +£71 | +£97 |
| 5-bed detached house | +£10 | +£21 | +£35 | +£48 | +£68 | +£92 | +£126 |
Average energy bill calculations are based on energy consumption data from the EPCs of all homes for sale on Rightmove in October 2024, combined with the latest energy meter data, factoring in the latest energy price cap for January to March 2025.
Does the energy price cap affect me?
If you’re on a fixed tariff for your energy supply, there’ll be no change to how much you pay.
The energy price cap is only applied if you’re on a default energy, or standard variable, tariff. This includes those who pay by direct debit, standard credit, prepayment meter, or who have an Economy 7 (E7) meter.
From 1 October 2023, changes were made to how the discount is paid for homes that have pre-payment meters installed. Instead of being delivered as a discount to unit rates, a discount will be applied to the standing charge.
If you pay by direct debit, your energy bills are usually based on an estimate of how much you use. So if you’re in credit, it’s worth doing a meter reading and getting in touch with your supplier to check you’re still paying the right amount.
How will the price cap change impact my energy bills?
You can check the average rate charged per unit of energy used below, and compare that with your household energy bills to work out an estimate of your household’s energy usage.
Energy price cap: What’s the average rate charged per unit of energy used?
| Jul-Sep 2024 | Oct-Dec 2024 | Jan-Mar 2025 | |
|---|---|---|---|
| Gas | 5p per kWh | 6p per kWh | 6p per kWh |
| Electricity | 22p per kWh | 24p per kWh | 24p per kWh |
Source: Ofgem. Based on average rates for direct debit users, which vary by region
Ofgem estimates a typical or ‘medium-use household’ as a two- to three-bedroom house with 2 or 3 people living in it.
If you live in a flat, or a one-bedroom house, your energy use is estimated to be ‘low’. And if you live in a four-bedroom home, with 4-5 people, your energy use is estimated to be ‘high’. See below.
| Energy use | Example – size of home & number of residents | Typical annual gas use | Typical annual electricity use |
|---|---|---|---|
| Low | Flat or 1-bed house; 1-2 people | 8,000 kWh | 1,800 kWh |
| Medium | 2-3 bed house; 2-3 people | 12,000 kWh | 2,900 kWh |
| High | 4+ bed home, 4-5 people | 17,000 kWh | 4,300 kWh |
| Source: Ofgem |
Source: Ofgem
The current rates and standing charges in your region are outlined here.
How much you’ll pay also depends on how energy-efficient your home is, and which appliances you use – and how often you use them.
Energy usage is calculated in kilowatt (kWh) hours, or units. One kWh is enough to power a 100-watt lightbulb for 10 hours, but in comparison, it takes 4.5 kWhs to power a single cycle of a tumble dryer.
Will there be a change to the standing charge on my bill?
The fixed standing charge you pay is just to have a connection, regardless of how much energy you use. It’s also used to cover things like maintenance of the supply network, take meter readings, and to support government and environmental schemes.
The amount you’ll pay depends on your supplier, what tariff you’re on, and where you live. From October to December 2024, this was edging closer to 61p for electricity, and 31p a day for gas. Under the January to March 2025 price cap, the standing charges remain similar.
Ofgem launched a review into standing charges in 2023, and recommendations on changes to the charge are due to be published later this year. This formal consultation will lead to a policy on standing charges.
Is there anything I can do to save money on my bill?
When energy bills were at their peak in 2022, switching to a different supplier was no longer an option for saving money on your energy bills. But now, switching to a new supplier, or checking whether your existing supplier has a better deal, might just save you money.
You can use our calculator to check whether you could reduce your bills by switching.
Will energy prices keep rising?
The Energy Price Cap covers a period of three months and changes four times a year: in January, April, July and October.
READ MORE: What’s the average UK energy bill and how can I save money?
