We know energy bills are on everyone’s mind right now, so we’re here to break down the latest changes to the energy price cap and what they mean for you.
What Is the Energy Price Cap?
The energy price cap is a limit set by Ofgem (the energy regulator) on the maximum price energy suppliers can charge per unit of gas and electricity for customers on a standard or default tariff.
It’s designed to protect households from unfair pricing and is updated every three months to reflect market conditions. From 1 January 2025, here’s what the new cap looks like:
- Gas: 6.34p per kWh
- Electricity: 24.86p per kWh
For a typical dual-fuel household paying by direct debit, this means an annual bill of £1,738, up slightly from £1,717. If you pay quarterly by cash or cheque, it’s a bit higher at £1,851.
What Should You Do Right Now?
We recommend taking a few proactive steps to make sure you’re on top of your energy bills:
Submit a Meter Reading
If you don’t have a smart meter, it’s a good idea to submit a meter reading before the price cap changes. This ensures you’re charged the right rate for your usage.
Check Your Tariff
Fixed tariffs can offer stability, but with prices changing every three months, it’s worth weighing your options. Check for exit fees and compare deals carefully.
Understand Your Usage
The price cap is based on a “typical household” – but every home is different. Factors like the size of your property, energy efficiency, and even the weather can all impact your bill.
What About Prepayment Meters?
If you’re on a prepayment meter, your bills will be slightly lower than those on direct debit. Between January and March, the average bill for prepayment customers will be £1,690.
However, prepayment meters often come with higher costs overall, so it’s worth exploring your options. Remember, new rules mean energy companies must work with you to clear any debt before installing a prepayment meter.
Standing Charges – The Fixed Fee We All Pay
Did you know part of your energy bill is a fixed daily charge just for being connected to the grid? These charges have risen by 43% since 2019, now sitting at about 61p a day for electricity and 32p a day for gas.
The good news? Ofgem is looking into offering customers more flexibility with standing charges from winter 2025, so you’ll have more control over your energy costs.
Support Available for Energy Bills
We know it’s not easy to keep up with rising costs, but there’s help available:
- Warm Home Discount: Discounts for eligible pensioners and low-income households.
- Household Support Fund: Assistance for vulnerable customers, extended until March 2025.
- Affordable Payment Plans: Energy suppliers are required to offer payment holidays or tailored plans if you’re struggling.
And we’re here to help! If you have any questions about energy-efficient heating solutions that can keep you warm while lowering your energy bills, don’t hesitate to contact us on 0800 599 9109. Our team is ready to guide you toward smarter, more sustainable options for your home.
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