~7m customers are now avoiding the Price Cap on incentivised tariffs

The number of customers on fixed and non-standard tariffs has more than doubled following the energy crisis, as suppliers introduced meaningful discounts against the Price Cap in 2024.

 This aligns with the gradual rise in switching activity observed throughout the year. 

Our analysis shows:

• In 2020, ~10m customers were on fixed tariffs, with ~500K switches per month
• By late 2021, suppliers were unable to offer tariffs below the Price Cap, leading to an 80% drop in switching activity
• By Oct-23, only ~3m customers (11%) remained on fixed/non-standard tariffs
• In 2024, suppliers began offering meaningful discounts against the cap, with ~7m customers on non-SVTs by Oct-24, marking a steady return of switching activity

With a 6% increase in the Price Cap announced from April (to £1,849), switching to alternative tariffs remains the best way to save, meaning we could see these trends continue in 2025.

April Price Cap rises to £1,849 – tariff changes planned, and billing pressure grows

Ofgem have announced the energy Price Cap for April 2025 will be set at £1,849, reflecting a £111 (6.4%) increase from January’s headline value.

This marks the third increase in a row and the highest level since January 2024. The increase has been largely driven by higher forward wholesale costs, which rose by ~20% during the observation window.

Key points:

• April Price Cap set at £1,849, an increase of £111 (6.4%) from January, marking the third consecutive rise
• When adjusted for seasonal consumption, typical households could pay ~£,1850 from 1st April, £150 (9%) more than the 12 months to 31st March
• Affordability remains a key concern, with the cap projected to remain above £1,800 throughout 2025
• Government action on fuel poverty increasingly urgent, with energy debt reaching ~£4bn and at least 5m households affected

In our full article, we also discuss Ofgem's plans for standing charge reform, with offering low or no standing charge tariffs to become a requirement for suppliers. There's also increasing pressure to shorten the back billing window to 6 months, carrying a £200m+ risk.

For more on April’s Price Cap increase and the impact on customers, contact Matt Turner.