Energy bills increase for new year as price cap is lifted

The price cap will rise from £1,834 per year to £1,928 a year from January 1.

Households could be in for yet another rise in energy costs in April as market “turbulence” and price cap reforms feed through to bills, analysts say.

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The latest forecast from Cornwall Insight suggests that the energy price cap could rise again due to continued uncertainty regarding the future of the Russia-Ukraine conflict and its implications for gas supplies to Europe.

This hasn't been helped by the second Donald Trump presidency and its impact on gas exports from America.

Meanwhile, new energy network charges and other costs was also compounding an increase in the underlying costs of electricity and gas.

There was also the prospect of reforms adding extra costs to the cap, which could add at least another £20 to annual bills, Cornwall said.

But prices are expected to fall in July.

Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “Energy bills in 2025 are shaping up to reflect a perfect storm of regulatory changes and market turbulence, in addition to any broader sector reforms put forward by the new Government.

“While the wholesale market will remain a key driver of prices, Ofgem’s reforms and the introduction of new charges could raise costs further for households.

“There are a lot of unknowns, and while significant rises in price are currently unlikely, the scale of any increases will depend on how the market and the reforms unfold.”