Millions of UK households will see higher energy bills starting in April as Ofgem, the energy regulator, raises its price cap for the third consecutive quarter. The new cap will push average annual costs up by £111 to £1,849, marking a 6.4% increase. This sharp rise is significantly more than the 1.2% previously forecasted by industry analysts.
The ongoing volatility in the energy market means consumers face persistent financial pressure, with campaigners warning that the latest increase will be unbearable for struggling families. Meanwhile, the government is exploring measures to support vulnerable households, including expanding the warm home discount and addressing rising energy debt.
How Much Will Energy Bills Increase?
From April, the cost of gas and electricity for households on variable tariffs will rise due to the new energy price cap. The cap does not limit the total bill but instead restricts the unit price suppliers can charge.
Here’s how key rates will change:
| Energy Type | Current Rate (per kWh) | New Rate (per kWh) | Standing Charge (Current) | Standing Charge (New) |
|---|---|---|---|---|
| Electricity | 25p | 27p | 61p | 54p |
| Gas | 6.34p | 6.99p | 31.65p | 32.67p |
Households using more than the typical amount of energy could see even steeper increases.
Why Are Energy Prices Rising?
Ofgem cites rising wholesale energy prices across Europe as the key driver behind the latest increase. The UK remains heavily reliant on international gas markets, which leads to price volatility. The impact of Russia’s invasion of Ukraine three years ago continues to influence global energy costs, leaving households paying around £600 more per year compared to pre-war levels.
Who Will Be Most Affected?
Around 9 million households on variable tariffs will experience an immediate hike in their bills once the new cap takes effect. Those on fixed-rate tariffs will not see immediate changes but could face higher costs when their contracts expire.
Campaigners warn that the increase will hit vulnerable groups hardest, particularly families with children and pensioners. Many households are already struggling with high energy costs, and the additional burden could push more people into fuel poverty.
Government Plans to Ease the Burden
In response to the price hike, the government is exploring several measures to support households, including:
- Expanding the Warm Home Discount: This program offers a £150 discount on winter energy bills for eligible households. The government aims to extend this support to an additional 2.7 million homes, including nearly 1 million families with children. If implemented, a total of 6.1 million households could benefit next winter.
- Tackling Energy Debt: Ministers are working with Ofgem to accelerate proposals aimed at addressing unsustainable household energy debt. The goal is to reduce energy costs by £25-£30 per year for struggling families.
- Investing in Clean Energy: Energy Secretary Ed Miliband emphasized the need for a homegrown clean energy system to reduce dependence on volatile fossil fuel markets. The government has committed to lowering household bills by £300 annually by 2030 through its clean energy initiatives.
The Impact on Consumers
Households across the UK are already feeling the strain of prolonged high energy costs. Charities and advocacy groups warn that many families are forced to ration heating, leading to potential health risks.
Adam Scorer, CEO of National Energy Action, described the situation as dire, with energy debt at record levels. Dame Clare Moriarty of Citizens Advice also highlighted concerns about families with children, noting that over one-third struggle to afford their bills, rising to more than half for those on low incomes.
What Can Households Do?
While energy prices remain high, there are steps households can take to manage costs:
- Check Eligibility for Government Support – If you qualify for the warm home discount, ensure you claim it. Additional assistance may also be available through local councils or charities.
- Improve Energy Efficiency – Simple changes like sealing drafts, using energy-efficient appliances, and adjusting thermostat settings can help reduce energy consumption.
- Consider a Fixed Tariff – While variable tariffs will rise, some fixed-rate deals may offer better stability, depending on market trends. Compare options to see if switching makes sense.
- Monitor Energy Usage – Smart meters can help track and manage energy consumption more effectively.
The upcoming price hike highlights the need for long-term solutions to stabilize energy costs. In the meantime, households should stay informed about available support and consider energy-saving measures to mitigate the impact of rising bills.
FAQs:
What is the energy price cap, and how does it work?
The energy price cap is a limit set by Ofgem on the price suppliers can charge per unit of gas and electricity. It does not cap the total bill, which depends on household energy usage.
Who will be most affected by the April price increase?
Households on variable tariffs—about 9 million in total—will see immediate increases. Those on fixed tariffs will not be affected until their contracts end.
What government support is available to help with energy bills?
The government is expanding the warm home discount, potentially helping 6.1 million households. Ministers are also working to reduce energy debt burdens by £25-£30 per year.
Will energy prices continue to rise after April?
Analysts suggest prices could increase further next winter due to ongoing volatility in the energy market. However, government plans for clean energy investment aim to lower costs in the long run.
