Price cap to jump by 6.4% from April

This increase pushes the overall rate to £1,849 for the average household paying by direct debit – 9.4% or £159 higher than during the same period last year. The announcement comes as the latest statistics from the regulator revealed household energy bill arrears hit a record £2.9bn in the third quarter of 2024.

Richard Lane, Chief Client Officer at StepChange, said: "The increase in the energy price cap will pile more pressure onto households who are already grappling with increases in the cost of living from all angles.

"New StepChange clients are £2,500 in the red with their energy bills on average, and with council tax and water bills also set to rise shortly, this latest news will heap yet more pressure on them, and millions of other struggling households."

Since Ofgem’s last price cap announcement, four million customers have moved to a fixed tariff – bringing the total number of people not affected by the change to 11 million. This represents the largest movement of customers coming off the price cap and onto a fixed deal since the energy crisis began.

Ofgem Chief Executive Jonathan Brearley said: "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."

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