If you're an energy bill payer, you'll know UK energy prices seem more expensive than ever... WHY?
A combination of poor UK energy policy and unsustainable financial support for large costly energy projects is making energy prices more expensive for UK consumers and businesses.
Current energy prices in the UK are some of the highest in the world. The decision by regulator Ofgem to ban incentivised pricing for new customers has resulted in a lack of challenger pricing. While UK households have faced rising bills due to successive increases in the UK energy price cap over the past 6 months.
The Labour government, in particular DESNZ minister Ed Milliband’s ambitious 2030 ‘clean energy’ targets have added to rising energy costs. Mr Milliband says his plans should provide cheaper energy and lower bills in the future. Many people feel he’s too optimistic and that if prices don’t come down soon Mr Milliband risks creating unnecessary fuel poverty for UK households. Businesses are also struggling with higher energy costs which they say are damaging UK business competitiveness.
The average home currently pays energy bills of £1,738 a year (based on a duel fuel electricity & gas supply), but this is set to increase again in April 2025 by 6% to £1,849 when Ofgem increases the energy price cap yet again.
...it's more vital than ever for UK households to get money savvy. Switching to a cheaper energy deal could really save you £100's each year!
UK requires urgent upgrades to the energy grid
The UK’s ageing energy grid is not prepared for NET zero. New substations, converter stations and pylons are needed across the country, to move energy from where it is generated, to where it is needed. But new infrastructure takes years to plan and build.
Decades of underinvestment in the grid and poor forward planning has resulted in a dash for costly improvements which will be reflected in higher energy bills across the UK.
High UK energy prices - Key Issues
Reliance on gas
The UK relies heavily on gas for power and heating, the UK is importing more and more expensive gas to meet demands. New UK gas reserves could be extracted from the north sea, however Ed Milliband seems to be against this in favour of renewables and rising bills for every household across the UK.
Poor gas storage in the UK
The UK has limited gas storage capacity compared to its gas consumption. In fact the UK’s gas storage capacity has actually reduced in last decade. This is at a time when the nation has been more reliant on gas than ever.
Environmental taxes
The UK government has introduced taxes on electricity to help reduce carbon emissions and fund renewable energy projects. These taxes are making energy more expensive for everyone.
Limited use of UK natural resources
The UK could be self-sufficient in gas and oil, however the Labour government appears to be against making best use of UK resources in a dash to NET Zero.
Policy inconsistency
Successive governments have failed to future proof the UK energy market. Years of inconsistent energy policy and underinvestment have resulted in the UK not being self-sufficient for its energy needs and more vulnerable to price spikes and energy shortages.
Poorly insulated homes face the biggest increase in energy bills
Homes with poor insulation and poor energy efficiency face the biggest impact of rising energy prices on bills.
Rightmoves energy bill tracker shows how EPC ratings affect energy costs for different types of property.
Homes with a ‘C’ energy rating could pay around twice as much as those with an ‘A’ rating. Homes with a ‘D’ rating could pay around 3 times as much on energy and homes with a ‘E’ rating or worse could be paying 4 times or more on energy bills than the most energy efficient homes.
Will energy prices rise or fall in 2025?
The next energy price cap will be in place from April to the end of June, some analysts believe there could be a small decrease in July however there are concerns more increases will come towards the end of 2025.
A number Analysts are warning that it’s likely energy prices will be higher at the end of the 2025 than they are now.
How to lower your energy bills
A few simple steps can make your household more energy efficient. We can all make changes to reduce waste and lower our household energy bills.
See our ‘Energy Saving Guide‘ for great money saving, energy saving tips.
Do you think you’re paying too much for your electricity & gas?
Compare energy deals from UK energy providers, see if you can save.
