Energy prices 2025 – what to expect and what is predicted to change

Published 25th February 2025

Energy prices change regularly for many different reasons – from what’s going on in the world, to shifts in energy supply and demand. Even the weather has a big impact. Not just because it affects the amount of energy we use, but how much we’re creating from renewable sources like solar and wind.

From 1st January this year, the energy price cap rose by 1.2% compared to the last three months of 2024. And they’re changing again on 1st April. But the big question is: will energy prices go down in 2025?

In this article, we explain how energy prices are changing and predicted to change in 2025¹ what the energy price forecast means for you, and what you can do to save money on your bills.

2025 gas and electric prices

Who decides the price of energy anyway?

That would be the UK’s energy regulator, Ofgem. Every three months, they set the energy price cap. It tells energy suppliers like us the maximum amount we can charge for each unit of gas or electricity, as well as the daily standing charges.

For the most recent price cap, which runs from 1st January to 31st March 2025, Ofgem increased prices by 1.2%. This is because the wholesale cost of energy – the price suppliers like us pay for gas and electricity – remains relatively high. This is partly due to ongoing conflicts and the uncertainty of supply from the big energy-producing regions around the world.

But what’s 1.2% in real money? It means that the average household’s energy bill is now £1,738 per year – a £21 increase from the October to December 2024 price cap.

It’s important to note this is a national average energy bill that assumes you live in an average home, use an average amount of gas and electricity, and pay by Direct Debit. So your estimated annual cost could be very different and will largely depend on the amount of energy you use.

What are prices looking like in 2025 compared to last year?

While energy prices went up by 1.2% for the January to March 2025 price cap, these higher prices are 10% cheaper than they were the same time last year. From January to March 2024, the average annual energy cost was £1,928 (versus £1,738 in 2025).

OFGEM have announced the energy price cap for April-June which will increase by 6.4% to £1,849 per year – £111 higher than the January to March price cap for a typical household who use electricity and gas and pay by Direct Debit.

*Based on using 11,500 kWh of gas, 2,700 kWh of electricity, and paying by Direct Debit.

Are energy prices expected to remain high for the rest of 2025?

While we’ve seen that UK energy prices will increase for the April price cap, it’s hard to say what the rest of 2025 will hold.

Our best guess now is that energy prices will fall slightly in July with the average annual energy cost decreasing by c.5%; however, this would still represent a 5% increase on the January cap. After this, expert analysts currently expect far smaller subsequent changes for the one or two quarters after that.

Temperature changes and external world factors could cause these predictions to change. For example, a few weeks ago, the forecasted change in July was a 3-6% increase. 

What can I do to reduce my energy bill in 2025?

While it’s impossible to control energy prices and stop them from rising, there are several ways you might be able to save money on your bills regardless.  

Switch to our fixed and flexible tariffs

Standard Variable tariffs are connected to the price cap. If you like the flexibility of a variable rate but want to pay less than the price cap, then choose our Price Cap Guarantee tariff.

If you prefer price certainty, then our fixed tariff gives you the peace of mind of guaranteed prices for the length of your contract. Protecting you from price rises and unpredictability. And if we launch a cheaper fixed tariff in the future, you can switch for free.