As part of our commitment to keeping you informed about energy costs, we want to update you on the latest changes to the energy price cap, which will be in effect from 1 January to 31 March 2025.
What is the Energy Price Cap?
The energy price cap sets a limit on how much suppliers can charge for each unit of energy (electricity and gas) and the daily standing charge. It is reviewed every three months to reflect changes in wholesale energy prices and other costs.
Key Changes to the Price Cap
– From 1 January to 31 March 2025, the price for energy for a typical household using electricity and gas and paying by Direct Debit will increase by 1.2% to £1,738 per year.
– Despite this increase, the new price cap remains 10% (£190) lower than the cap set for 1 January to 31 March 2024 (£1,928 per year).
– The change is primarily driven by high wholesale energy prices due to ongoing global factors.
Who is Covered by the Energy Price Cap?
You are covered by the price cap if you pay for your electricity and gas through any of the following methods:
– Standard credit (paying after receiving your bill)
– Direct Debit
– Prepayment meter
– Economy 7 (E7) meter
However, the actual amount you pay will depend on your household’s energy usage, your location, and your meter type.
New Energy Price Cap Rates (1 January – 31 March 2025)
Electricity Rates
If you are on a standard variable tariff (default tariff) and pay by Direct Debit:
– Unit rate: 24.86 pence per kWh
– Daily standing charge: 60.97 pence per day
(Averages across England, Scotland, and Wales, including VAT)
Gas Rates
If you are on a standard variable tariff (default tariff) and pay by Direct Debit:
– Unit rate: 6.34 pence per kWh
– Daily standing charge: 31.65 pence per day
(Averages across England, Scotland, and Wales, including VAT)
How is the Price Cap Calculated?
The energy price cap consists of various costs, including:
– Wholesale gas and electricity costs
– Energy network supply costs
– Operating costs and VAT
These costs are distributed between the unit rate and the standing charge to ensure a fair pricing structure.
How Can You Reduce Your Energy Bills?
While the price cap sets a limit on what suppliers can charge, you could pay less by:
– Switching energy suppliers
– Changing your tariff or payment type
– Improving your home’s energy efficiency through insulation and heating grants
Next Energy Price Cap Review
The next price cap, covering 1 April to 30 June 2025, will be published by 25 February 2025. Stay tuned for further updates to ensure you stay informed about energy pricing changes.
If You’re Struggling With Your Bills, Contact Us
If you’re struggling to pay your heating bills this winter, don’t hesitate to contact us to see whether you could qualify for a grant to help with your heating bills. Whether it’s free insulation, solar panels, or even a new boiler, we provide free energy efficiency updates for households that qualify, to make your home warmer and cheaper to heat.