The UK’s energy regulator, the Office of Gas and Electricity Markets (Ofgem), has announced a 6.4% increase in the energy price cap from April to June 2025.
The new cap will raise the average annual household energy bill to £1,849 ($2,334.18) – up £111 from the previous cap.
Since Ofgem’s November 2024 price cap update, four million customers have switched to fixed tariffs while 11 million people are on fixed deals and won’t be affected by the cap change.
This is the largest shift to fixed deals since the energy crisis.
Ofgem CEO Jonathan Brearley stated: “We know that no price rise is ever welcome, and that the cost of energy remains a huge challenge for many households.
“But our reliance on international gas markets leads to volatile wholesale prices, and continues to drive up bills, which is why it’s more important than ever that we’re driving forward investment in a cleaner, homegrown system.
“Energy debts that began during the energy crisis have reached record levels and without intervention will continue to grow. This puts families under huge stress and increases costs for all customers. We’re developing plans that could give households with unmanageable debt the clean slate they need to move forward.”
“We welcome the government’s support for these plans, and their plans to expand the Warm Home Discount, which will also offer financial help to nearly three million more households that need it most.
Starting from 1 April, most households in Britain will see a reduction in standing charges, though some regions may experience small increases of up to £20 per year for typical dual fuel customers.
This is because of changes in network cost, which is the cost of transportation of energy across the country.
Ofgem has welcomed the government’s support for its plans to address rising debt in the energy system and improve how debt is managed and customers are helped.
The plans could introduce a Debt Relief Scheme, where suppliers write off unpayable debt or help pay it off through debt matching with customer payments.
This scheme would be part of a wider set of measures, supported by the government’s proposed expansion of the Warm Home Discount (WHD), which intends to lower debt to pre-energy crisis levels and reduce costs for all consumers by £25 to £30 per year.
The regulator also aims to improve supplier service for customers struggling to pay their bills. The proposals would make it easier for consumers to access help from charities and debt support agencies.
The plans are supported by several stakeholders, who believe the scheme is key to helping those in serious payment trouble get back on track.
