Energy bills set to rise again

Millions of households are bracing themselves for yet another financial squeeze as energy bills are predicted to rise again next year.

Experts at Cornwall Insight say Ofgem’s energy price cap – which is going up in January to £1,738 a year – could climb even further to £1,762 from April.

The predictions are based on a mix of economic and geopolitical factors.

Think the ongoing war in Ukraine, Donald Trump returning to the White House, and general concerns about economic growth.

But these are just predictions – Ofgem won't confirm its April cap until late February 2025.

What is the energy price cap?

Ofgem's energy price cap is the highest price that energy suppliers can charge for each unit of energy and for standing charges.

It’s important to note that this cap doesn’t limit how much you actually pay.

Your total bill depends on how much energy you use. If you use more, you pay more. If you cut back, your bill shrinks.

Ofgem updates the price cap every three months.

Dr Craig Lowrey from Cornwall Insight says that energy bills in 2025 will reflect a “perfect storm” of market changes and regulatory shifts.

The wholesale market will influence prices, but we might see additional costs from Ofgem's reforms.

“The market is unlikely to lower bills, and affordability and fuel poverty will continue to be a pressing issue,” Lowrey adds.

Voices of concern

Simon Francis from the End Fuel Poverty Coalition pointed out that energy bills will be a staggering 70% higher than in the winter of 2020/21.

That's an extra £750 a year for households just to use a similar amount of energy as a few winters ago.

"This means more people living in cold damp homes, exposed to the health complications that come from living in fuel poverty,” Francis says.

He adds that although the UK government can’t control international gas prices, they can help reduce energy costs by fully funding the promised warm homes plan to help people insulate their homes.

“Anything less than the £13.2bn promised during the election campaign will simply not be good enough,” Francis warns.

Struggling with energy bills?

If you’re having trouble keeping up with your energy bills, reach out to your supplier.

Some suppliers provide grants if you’re really struggling, or you might be able to set up a payment plan for what you owe.

If you’re vulnerable, check if you can join the priority services register so you can get additional support from your energy supplier.

Read our guide on what to do about energy arrears.