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Feb 26, 2025

Energy Price Cap to Rise by 6.4% on April 1st

By Robert Wheeler

? Energy price cap will rise by 6.4% on April 1st, impacting both electricity and gas rates.

Fixing your tariff can save you money, as current standalone fixes are cheaper than the upcoming cap increase.

Low usage households should explore tracker deals, from British Gas & EDF, to save on standing charges.

Government to expand £150 Warm Home Discount to 2.7 million low-income households for winter 2025/26.

Following a 1% increase in January and a 10% rise last October, the energy price cap is set to rise again by 6.4% on April 1st. In this instant briefing, we’ll break down the key points and offer some practical advice on what to do next.

Electricity and Gas Charges

Electricity:

  • Standing Charge: Decreasing from 60.97p/day to 53.8p/day (down 11%).
  • Unit Rate: Increasing from 24.86p/kWh to 27.03p/kWh (up 8.7%).

Gas:

  • Standing Charge: Increasing from 31.65p/day to 32.67p/day (up 3.2%).
  • Unit Rate: Increasing from 6.34p/kWh to 6.99p/kWh (up 10%).

For every £100 you pay for energy now, from April, you’ll typically pay around £106.40. However, due to the daily standing charge drop, lower users (below £100/month) will see only small increases, while higher users (above £200/month) will likely experience increases of 7% to 10%.

It’s important to note that these are averages and there is significant regional variation in prices. For instance, the North West, Wales, and London are outliers as their electricity standing charges are rising.

How to Know If You’re on a Capped Tariff

If you’re not on a fixed or special deal, you’re likely on the Cap. This applies to firms’ standard default consumer tariffs, often referred to as ‘Standard Variable’ or ‘Flexible’ tariffs. If you’re unsure, assume you are, like two-thirds of homes.

Fixing Your Tariff or Getting Solar Panels

The price cap is not ideal, so if you haven’t already, consider fixing your energy tariff now, or better yet consider investing in solar panels for your home. Currently, the cheapest year-long standalone fixes are about 4% less than the current Cap, which will save you money once the cap rises in April. Fixing your tariff now will lock in a cheaper rate for a year, provide price certainty, and yield instant and relative savings by April, whereas getting solar panels although will cost to install, will save you money on your energy bills from day 1 and will continue to save you money for 25-30 years and you will probably be able to pay off the initial installation in between 5-7 years on average depending on your property, sunlight and energy usage.

Your cheapest fix depends on your location and energy usage which is the same for solar panels. For a comparison, visit the MSE Cheap Energy Club (www.cheapenergyclub.com). Note that new tariffs are being launched, so it’s worth waiting a few days to see the latest options. Savings comparisons are currently shown against the existing cap, but they will be larger compared to April’s rates.

What to Expect After April

Analysts predict that after the price rise in April, rates will remain roughly the same for the next year. However, this forecast is subject to change, depending on various geopolitical factors. The safest bet, based on current predictions, is to fix your tariff or invest in solar panels.

Alternative Options to Fixing

For those with very low usage (under £80/month), consider British Gas and EDF’s special tracker deals, which discount £50 off the annual standing charge. Sophisticated users might also consider Octopus or Tomato’s time-of-use tariffs.

Warm Home Discount

The government proposes to expand the £150 Warm Home Discount to 2.7 million more low-income households for winter 2025/26. However, part of this will be offset by the cap rise, which translates to £111/year on an annualised bill.

To achieve this, the ‘high energy cost’ criteria for those on means-tested benefits, such as Universal Credit (UC), will be removed. This change aims to rectify a flawed system that left many unfairly out in the cold.

There is also a proposal for old energy debt support, which sounds promising but requires further reading.

More Information to Come

These are my initial thoughts. More details will follow.

Are you ready to beat the energy bill rises & invest in Solar Panels?

If you are interested in beating the continuing energy bill rises by installing solar panels at your home or business, contact us today on 01268 928 690 or via the ‘Enquire Now’ button below. We are an accredited MCS installer of solar panels and battery storage solutions so we can install your complete Solar PV System to MCS Standards and we can help you with every step of the process, from a free no-obligation quote and solar PV system design service to installation to aftercare.

FAQs: Energy Price Cap to Rise by 6.4% on April 1st

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