Ofgem's Energy Price Cap is set to increase by 5% (~£80) in April 2025 to ~£1,815, and could stay at around ~£1,800 for the next 12 months, based on the latest BFY Group projection.
Key points:
- Price Cap to rise 5% (~£80) in April 2025 – BFY Group expect Ofgem to set the cap at ~£1,815, an increase of £77 based on wholesale prices so far, with 11 days left in the current observation window. Current wholesale prices also suggest the cap could stay around this level throughout the year.
- Affordability remains a major concern – With energy debt at a record ~£4bn, another bill increase will exacerbate the financial pressure already being felt by households.
- Savings can be made by switching tariffs – Ofgem is considering measures to address affordability concerns, but until then, switching to alternative tariffs remains the best way for customers to save. This could drive further growth in switching levels throughout 2025.
BFY Group are expecting Ofgem to set the cap at ~£1,815, an increase of £77 based on wholesale prices so far, with 11 days left in the current observation window. Current wholesale prices also suggest the cap could stay around this level throughout the year.
While wholesale costs may ease later in 2025, rising operating and network costs could offset any reductions.
With ‘typical’ annual bills at ~£1,800, affordability remains a major concern. Energy debt has now reached ~£4bn, as many customers struggle to pay.
Ofgem are exploring possible interventions to address this. But until this happens, the only way for customers to make savings is by seeking out alternative tariffs. This could see switching continue to grow in 2025.
Ian Barker, Managing Partner at BFY Group, said:
"The expected rise in Ofgem's Price Cap to £1,815 will be unwelcome news for households already struggling with record energy debt, now at ~£4bn.
"While the cap is expected to remain stable throughout 2025, bills are still significantly higher than pre-crisis levels. As Ofgem explores potential interventions, switching to alternative tariffs remains the only way for customers to save - driving continued growth in switching activity."
About BFY Group
BFY Group is one of the UK’s fastest-growing management consultancies, trusted by leading organisations in the Energy, Utilities, and Private Equity sectors. The firm partners closely with clients, providing practical solutions to their most complex challenges, identifying opportunities, and delivering lasting results.
Founded in 2004, BFY Group remains an independent, privately owned consultancy based in Nottingham, serving clients across the UK.
Specialising in Transformation, Strategy and Commercial Excellence, Operational Turnaround and Recovery, and ESG and Carbon Reduction, BFY Group supports a wide range of organisations, including major energy retailers - covering 75% of the UK market- as well as emerging firms. The consultancy also works across the broader energy value chain and utilities sector, encompassing water, energy services, and infrastructure.
For PR and media enquiries, contact: pressoffice@bfygroup.co.uk
