New energy charges have come into force from the start of January, leaving millions of households paying more for gas and electricity. The new year has brought increased cost of living struggles and more bad news for many.
Increases are relatively small – £21 a year – but with millions already feeling their energy bills were too high, latest rises will only add to the strain on household finances. And there’s more pain on the way from April, when the regulator Ofgem is expected to raise the Energy Price Cap once again.
Experts have warned energy prices are likely to remain high throughout 2025. It means families are likely to notice hikes to bills over the coming weeks and months. Households have been advised to consider fixing bills, if they can find a tariff below the January price cap.
READ MORE: New £200 cost of living payments confirmed for 2025
Get our best money saving tips and hacks by signing up to our newsletter
The Energy Price Cap determines typical bills paid by UK households. The January rate of £1,738 a year is a £21 increase compared to October. Ofgem sets the cap every three months, leading critics to state it is not much of a cap at all.
Households can still pay more than the cap rate if they use more energy. Ofgem said: “Every three months we review and set a level for how much an energy supplier can charge for each unit of energy and daily standing charge, under the price cap.
From January 1 to March 31, 2025 the price for energy for a typical household who use electricity and gas and pay by direct debit will go up by 1.2% to £1,738 per year. This is because wholesale prices remain high due to global factors.
“This is 10% (£190) per year lower than the price cap set from January 1 to March 31, 2024 (£1,928).”