London Daily

Focus on the big picture.
Wednesday, Dec 17, 2025

Why are gas bills so high and what's the energy price cap?

Why are gas bills so high and what's the energy price cap?

Electricity and gas bills for a typical household will go up by £693 a year in April, a 54% increase.

The government says financial support will help cover some of the rise.

How much will my energy bill go up?


Around 18 million households on standard tariffs will see an average increase of £693 - from £1,277 to £1,971 per year.

Around 4.5 million prepayment customers will see an average increase of £708 - from £1,309 to £2,017.

The amount your bill will go up depends on how much energy you use.

Energy bills won't rise immediately for customers on fixed rates, but many are likely to see a significant increase when their deal ends.

What is the energy price cap?


Bills are going up because the energy price cap - the maximum price suppliers in England, Wales and Scotland can charge households - is being raised.

Energy firms can increase bills by 54% when the new cap is introduced in April.

Prices are expected to rise again in October.


What help can people get?


The government says it will offer extra help worth a total of £350 - just over half the increase facing a typical household:

*  April: People in council tax bands A to D in England will receive a one-off £150 discount. This will apply to about 80% of homes

*  October: Customers in England, Scotland and Wales will receive a £200 rebate on their energy bills. They will have to repay this at £40 a year for five years, starting in April 2023

In England local authorities will also have access to a £150m fund to help lower income households living in higher council tax properties. It will also help households in bands A to D who already don't pay council tax.

The warm house discount scheme will be expanded, to cover three million households. It offers low income households a one-off annual discount on their electricity bill, and was worth £140 in 2021/22.

Because the council tax measures only apply in England, £565m will be given to other UK nations to fund equivalent help.

The Northern Ireland energy market is separate, but the government said £150m would be available to support households there.

The government ruled out scrapping the 5% VAT rate on household heating bills, as it said this would disproportionately help wealthier households.


How do energy prices affect the cost of living?


More households are expected to find themselves facing fuel poverty - meaning they spend a disproportionate amount of their income on energy.

The way fuel poverty is measured varies around the UK.

In Scotland, a household is in fuel poverty if more than 10% of its income is spent on fuel and its remaining income isn't enough to maintain an adequate standard of living.

Based on this measure, the Resolution Foundation think tank expects the number of homes facing "fuel stress" across the UK to treble to 6.3 million after April. It says pensioners and people in local authority housing will be hit hardest.

It warns UK households are facing a "cost of living catastrophe".

Food prices are also rising, and an increase in National Insurance in April will leave millions facing higher tax bills.

The Bank of England has put up interest rates for the second time in three months to try and slow price rises.

Why have gas prices gone up?


A worldwide squeeze on energy supplies has pushed the price of gas prices up to unprecedented levels:

*  a cold winter in Europe in 2020/21 put pressure on supplies and reduced the the amount of gas stored

*  a relatively windless summer in 2021 made it difficult to generate wind energy

*  increased demand from Asia - especially China - put pressure on liquefied natural gas supplies

The UK is relatively hard-hit because about 85% of homes have gas central heating, and gas generates a third of the country's electricity.


Why have energy firms collapsed?


When wholesale gas prices spiked, many energy suppliers collapsed - affecting millions of households.

This is largely because the energy price cap prevented them passing on all of their increased costs to customers.

When their supplier went bust many households were switched to a more expensive deal with another supplier.


How can I protect myself from rising prices?


In the past, consumers have been encouraged to shop around when bills rise.

But at the moment better offers - especially fixed deals - are not available.

People already on fixed deals are advised to stay put.

Other households are being encouraged to improve the energy efficiency of their homes.

The Energy Saving Trust says simple changes to our homes and habits could offset the current price rises.


Newsletter

Related Articles

0:00
0:00
Close
Trump Files $10 Billion Defamation Lawsuit Against BBC as Broadcaster Pledges Legal Defence
UK Says U.S. Tech Deal Talks Still Active Despite Washington’s Suspension of Prosperity Pact
UK Mortgage Rules to Give Greater Flexibility to Borrowers With Irregular Incomes
UK Treasury Moves to Position Britain as Leading Global Hub for Crypto Firms
U.S. Freezes £31 Billion Tech Prosperity Deal With Britain Amid Trade Dispute
Prince Harry and Meghan’s Potential UK Return Gains New Momentum Amid Security Review and Royal Dialogue
Zelensky Opens High-Stakes Peace Talks in Berlin with Trump Envoy and European Leaders
Historical Reflections on Press Freedom Emerge Amid Debate Over Trump’s Media Policies
UK Boosts Protection for Jewish Communities After Sydney Hanukkah Attack
UK Government Declines to Comment After ICC Prosecutor Alleges Britain Threatened to Defund Court Over Israel Arrest Warrant
Apple Shutters All Retail Stores in the United Kingdom Under New National COVID-19 Lockdown
US–UK Technology Partnership Strains as Key Trade Disagreements Emerge
UK Police Confirm No Further Action Over Allegation That Andrew Asked Bodyguard to Investigate Virginia Giuffre
Giuffre Family Expresses Deep Disappointment as UK Police Decline New Inquiry Into Andrew Mountbatten-Windsor Claims
Transatlantic Trade Ambitions Hit a Snag as UK–US Deal Faces Emerging Challenges
Ex-ICC Prosecutor Alleges UK Threatened to Withdraw Funding Over Netanyahu Arrest Warrant Bid
UK Disciplinary Tribunal Clears Carter-Ruck Lawyer of Misconduct in OneCoin Case
‘Pink Ladies’ Emerge as Prominent Face of UK Anti-Immigration Protests
Nigel Farage Says Reform UK Has Become Britain’s Largest Party as Labour Membership Falls Sharply
Google DeepMind and UK Government Launch First Automated AI Lab to Accelerate Scientific Discovery
UK Economy Falters Ahead of Budget as Growth Contracts and Confidence Wanes
Australia Approves Increased Foreign Stake in Strategic Defence Shipbuilder
Former UK Prime Minister Boris Johnson proclaims, “For Ukraine, surrendering their land would be a nightmare.”
Microsoft Challenges £2.1 Billion UK Cloud Licensing Lawsuit at Competition Tribunal
Fake Doctor in Uttar Pradesh Accused of Killing Woman After Performing YouTube-Based Surgery
Hackers Are Hiding Malware in Open-Source Tools and IDE Extensions
Traveling to USA? Homeland Security moving toward requiring foreign travelers to share social media history
UK Officials Push Back at Trump Saying European Leaders ‘Talk Too Much’ About Ukraine
UK Warns of Escalating Cyber Assault Linked to Putin’s State-Backed Operations
UK Consumer Spending Falters in November as Households Hold Back Ahead of Budget
UK Orders Fresh Review of Prince Harry’s Security Status After Formal Request
U.S. Authorises Nvidia to Sell H200 AI Chips to China Under Security Controls
Trump in Direct Assault: European Leaders Are Weak, Immigration a Disaster. Russia Is Strong and Big — and Will Win
"App recommendation" or disguised advertisement? ChatGPT Premium users are furious
"The Great Filtering": Australia Blocks Hundreds of Thousands of Minors From Social Networks
Mark Zuckerberg Pulls Back From Metaverse After $70 Billion Loss as Meta Shifts Priorities to AI
Nvidia CEO Says U.S. Data-Center Builds Take Years while China ‘Builds a Hospital in a Weekend’
Indian Airports in Turmoil as IndiGo Cancels Over a Thousand Flights, Stranding Thousands
Hollywood Industry on Edge as Netflix Secures Near-$60 Bln Loan for Warner Bros Takeover
Drugs and Assassinations: The Connection Between the Italian Mafia and Football Ultras
Hollywood megadeal: Netflix acquires Warner Bros. Discovery for 83 billion dollars
The Disregard for a Europe ‘in Danger of Erasure,’ the Shift Toward Russia: Trump’s Strategic Policy Document
Two and a Half Weeks After the Major Outage: A Cloudflare Malfunction Brings Down Multiple Sites
UK data-regulator demands urgent clarity on racial bias in police facial-recognition systems
Labour Uses Biscuits to Explain UK Debt — MPs Lean Into Social Media to Reach New Audiences
German President Lays Wreath at Coventry as UK-Germany Reaffirm Unity Against Russia’s Threat
UK Inquiry Finds Putin ‘Morally Responsible’ for 2018 Novichok Death — London Imposes Broad Sanctions on GRU
India backs down on plan to mandate government “Sanchar Saathi” app on all smartphones
King Charles Welcomes German President Steinmeier to UK in First State Visit by Berlin in 27 Years
UK Plans Major Cutback to Jury Trials as Crown Court Backlog Nears 80,000
×