Households will have to shell out even more than anticipated on their energy bills from April when Ofgem’s price cap changes, according to new predictions.
The price cap increased to £1,738 in January 2025 as demand for gas and electricity rises in the colder months.
The rate applies to a home with average energy use, on a variable-rate energy tariff and paying by direct debit.
Energy experts Cornwall Insight predicted an increase in the price cap to £1,785 in April, an increase of nearly 3 per cent from the January price cap.
It initially thought bills would rise to £1,762 by April, but revised its forecasts upwards slightly on 31 December 2024.
However, energy suppliers now predict an even steeper increase by April as wholesale prices tick higher.
Energy customers might still be able to save by signing up to a fixed deal, and we outline some of those that undercut the current price cap – and therefore also the April one – below.
Price cap predictions: Energy suppliers now think April’s price cap will be much higher
EDF predicts the price cap will increase to £1,796 in April, a marginal increase from Cornwall Insight’s prediction.
It said: ‘The wholesale allowance for the April to June cap will finish indexing later this month, however there’s still potential for significant volatility in wholesale prices during the remainder of the indexation period as observed recently.’
It also said that there are other non-energy costs, including for transmission and distribution networks and low carbon subsidies, that are yet to be confirmed.
It predicts a further increase in July to £1,816 although its prediction confidence is ‘low’ and says it will depend on various factors.
British Gas predicts an even higher price cap of £1,825 between April and June, and another increase to £1,860 in July.
While the energy market has stabilised in recent months, British Gas warns that ‘surprises can happen’ and if geopolitical tensions worsen, prices could go up affecting its predictions.
Eon predicts a £109 increase between January and April’s price cap to £1,847, before increasing by £35 in July to £1,872.
Energy bills are unlikely to go back to historic norms at least until the end of the decade, Cornwall Insight has said. Prices will start to fall off by 2027/28 when more renewable energy is rolled out.
Is it to time to take out a fixed rate deal?
Households may be able to beat an increase in the price cap and save money by taking out a fixed-rate energy deal.
At the moment, most energy deals are still variable which means that they change price in line with Ofgem’s price cap.
However, there are more fixed deals coming to the market that offer set prices for unit rates and standing charges.
Most fixed deals on the market make savings against the January price cap and suppliers may introduce more once the April price cap is announced at the end of February.
These deals lock customers in for a period of time, at least 12 months, so the risk is that the price cap could fall later on and they would then be paying more – but it is unlikely the cap will drop dramatically in the near future.
Some suppliers have also introduced tariffs that track the price cap over the course of the year.
Last week, EDF announced a new tariff that tracks standard variable prices to undercut the price cap by up to £50 per fuel with the discount applied through lower standing charges.
Tariffs cheaper than the price cap
| Supplier | Tariff | Fix duration | Average annual bill | Saving vs. January cap (£1,738) | Exit fees | Availability |
|---|---|---|---|---|---|---|
| Outfox the Market | Fix’d Dual Feb25 v1.0 | 12 months | £1,623 | £115 | £25 per fuel | Direct via Outfox the Market |
| Outfox the Market | 18-Month Fix’d Dual Jan25 v6.0 | 18 months | £1,660 | £78 | £25 per fuel | Direct via Outfox the Market |
| Outfox the Market | 2-year Fix’d Dual Jan 25 v5.0 | 24 months | £1,662 | £76 | £50 per fuel | Direct via Outfox the Market |
| So Energy | So Wisteria Two Year – Green | 24 months | £1,684 | £54 | £75 per fuel | Uswitch.com, Confused.com, and direct via So Energy |
| Octopus Energy | Octopus 14M Fixed January 2025 v1 | 14 months | £1,694 | £44 | None | Direct via Octopus Energy |
| Co-op Energy | Co-op 14M Fixed January 2025 v1 | 14 months | £1,694 | £44 | None | Direct via Co-op Energy |
| Eon Next | Next Fixed 16m v3 | 16 months | £1,717 | £21 | £50 per fuel | Uswitch.com, Confused.com, and direct via Eon Next |
| British Gas | Fixed Tariff v25 | 12 months | £1,722 | £16 | £50 per fuel | Uswitch.com, Confused.com, and direct via Eon Next |
| So Energy | So Wisteria One Year – Green | 12 months | £1,722 | £16 | £50 per fuel | Uswitch.com, Confused.com, and direct via Eon Next |
| Sainsbury’s Energy | Sainsburys Fix and Reward Fixed 16m v2 | 16 months | £1,735 | £3 | £50 per fuel | Direct via Sainsbury’s Energy |
| Source: Uswitch.com. Prices correct as of 11.00am on 4th February 2025. Tariffs included within the table are the cheapest non-bundle fixed tariffs, not variable or tracker. All energy tariffs and prices mentioned are subject to change without notice, and rates vary upon region. These are the cheapest tariffs available based on suppliers who have updated Uswitch with their rates. | ||||||
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