Average Energy Bills in the UK in 2025

Energy costs in the UK are high, but do you ever wonder whether your home’s monthly energy bills are the average? Knowing where you stand can help you reflect and discover cost-saving opportunities that may be available to optimise your budget.

Get current details on energy prices in the UK, predictions for prices in 2025, and tips to reduce your bills and save money.

What Are the Current Energy Prices?

Energy prices in the UK are limited by a price cap, which is the maximum cost energy suppliers can charge you per unit of energy, plus a maximum daily standing charge for those on a standard variable tariff. 

The price cap ensures costs are fair and accurately reflect the energy price. The costs covered by the cap cover the comprehensive components that suppliers must manage, including:

• Wholesale costs
• Temporary cost adjustments
• Building, fixing, and repairing pipes to transport energy (known as network costs)
• Supplier business operating costs
• Government, social, and environmental policy efforts
• Earnings before interest and taxes allowance (EBITA)
• Uncertain costs and risks (buffer, headroom)
• Supplying energy customers using different payment methods
• Prepayment and direct debit customers charge levelisation
• VAT

The current price cap for electricity from 1 October to 31 December 2024 is 24.50 pence per kWh, with a 60.99 pence daily standing charge. The price cap for gas is 6.24 pence per kWh and 31.66 pence daily standing charge. 

Based on typical household consumption, households can expect to spend £1,717 per year within the current price cap window.

Why Are Energy Prices So High?

Energy prices in the UK have been higher in the years following the COVID-19 pandemic because the wholesale cost of gas has shot up due to lockdowns, cold winters, and geopolitical issues, just to name a few.

Anytime the wholesale cost increases, suppliers pay more for the same amount of electricity or gas and typically pass on these costs to the households using it. However, Ofgem’s price cap limits how much these costs can increase.

Wholesale prices dropped throughout 2023 but remain higher than they were previously. The price cap recently went up in October 2024 and will rise again in January 2025 to reflect the volatility that remains in the current markets.

Are Energy Prices Going Down in 2025?

Energy prices will not go down in 2025; instead, Ofgem is set to increase the price cap yet again. From 1 January to 31 March 2025, electricity costs will increase to 24.86 pence per kWh and 60.97 pence daily standing charge, while gas costs will increase to 6.34 pence per kWh and 31.65 pence daily standing charge. This brings the annual costs for the UK household to £1,738 per year if electricity and gas use is typical.

There’s some disagreement among experts about how prices will fare after this initial price cap window of the year. Cornwall Insight, an energy consultancy known for its accurate predictions, expects bills to fall a small amount (1.4%) in April and again in October 2025. On the other hand, experts from a UK energy management firm expect more volatility, uncertainty, and a considerable risk of increases.

Much is still being determined about the path that electricity and gas prices will take in 2025, as costs are highly susceptible to changing market conditions. As long as the UK is dependent on other countries for its gas supplies, residents may see increases due to international shocks, struggles, or events, such as the escalating conflict in the Middle East, required maintenance on Norwegian gas infrastructure, or weather disruptions. 

However, 2025 energy prices may become more stable than they have been over the past several years. The UK government recently launched Great British Energy, a campaign to reduce the country’s reliance on foreign suppliers. However, it will likely be many years before positive electricity and gas bill impacts are realised. 

Residents may enjoy steadier rates if the UK continues to work toward independence, net production, and renewable generation. Shifting strategies toward becoming a producer rather than a consumer and focusing on renewable sources would reduce dependence on foreign suppliers, reduce price spikes, relieve domestic storage issues, and thus lower users’ costs.

Looking further down the road, Cornwall Insight expects prices to fall in 2028 due to improved gas supplies and significant renewable energy output. Yet, wholesale costs will likely remain much higher than in the last decade, still 10%+ after inflation is considered.

How Can You Reduce Your Energy Bills?

Despite high energy prices in the UK, there are ways to save on your electricity bill. Here are three methods to find savings:

• Evaluate Your Energy Use: The first step is to monitor your home electricity usage and determine where to cut back. When you can see what time of day or day of the week you use the most energy, you can identify opportunities to reduce your consumption or optimise schedules to take advantage of lower-cost off-peak hours. You can make simple changes, like turning off the lights when you leave a room and unplugging electronics when not in use. You can also adjust your daily routine, focusing on power-intensive tasks like using laundry machines or dishwashers at night when rates may be lower. Another idea is investing in more efficient appliances that use less power.
• Improve Home Setup and Insulation: Embrace renewable energy and improve your energy set-up at home to see a big difference in your monthly gas and electricity bill. Use EcoFlow Portable Power Stations, like the robust EcoFlow DELTA Series Portable Power Stations, to store power during off-peak hours, which you can use when rates per watt-hour are higher. You could also invest in solar generators to supplement some of your home’s consumption, allowing you to use the grid less frequently and instead rely on home-produced, free, and renewable power. Other adjustments to your home setup can also pay off. Consider weatherproofing your home by adding stripping to your windows and doors to prevent air leaks, or add more insulation to your attic and walls to preserve heat or cool air indoors and allow your demanding HVAC system to work less hard.
• Invest in Renewable Energy: Even if your home has relied on the central grid for some time, it’s never too late to switch to an off-grid renewable source. Investing in a renewable generator like the EcoFlow DELTA Pro + 400W Solar Panel allows you to create and use your energy from the sun, while the EcoFlow Smart Home Panel integrates solar into your home’s existing electrical system. These modern systems are designed with convenience and cost savings in mind. They’re easy to set up, use, and fit into your life without adding extra complexity or challenges. If you disconnect from the grid and produce your home’s energy using solar power, you can enjoy free energy as long as the system performs.

Frequently Asked Questions

Final Thoughts

Energy bills in the UK are much higher than in the last decade and even in the years before the coronavirus pandemic. Since then, price caps have risen in the UK, with the next increase coming on the first of the year in 2025. International markets and issues and rising wholesale prices are driving these high prices, leading residents to scramble to find ways to reduce their monthly bills. 

The best way to avoid the volatile grid prices is to invest in renewable energy, with products like EcoFlow Solar Generators. These eco-friendly systems generate clean power using just the sun’s rays, allowing you to harness your energy independence and break free from rising costs.