The cold months are coming, and so is bad news for your wallet: the Energy price cap will go up in October 2025. Ofgem has announced a 2% increase from £1,720 to £1,755. While this may not seem like much, it can significantly affect your bills. Households across the UK, especially those on standard variable tariffs, should take action.
At Clarkwell & Co. Chartered Certified Accountants in London, we know that every penny matters, especially during tough times. We urge all households to secure cheaper energy rates now, before winter and higher usage arrive. This isn’t just about saving money; it’s also about having clear and predictable finances, which fits well with our Budgeting and Forecasting services. Being proactive with your expenses can give you peace of mind.
When energy prices rise, it affects every part of your budget. You need to adjust heating costs, electricity bills, and how you use appliances. The good news? You have options now. Don’t wait for the cold to push you into action; take control of your energy costs before they control you.
Why Millions Could Be Paying Too Much This Winter
Over 22 million people in the UK are on standard variable or default energy tariffs. This means they will feel the effects of any changes to the energy price cap. Industry analysts say that staying on these variable tariffs could add £76 to monthly energy bills from October to December, totalling over £220 in three months.
Many consumers don’t realise that not choosing a different energy supplier can slowly drain their money. You might not see a big jump in one bill, but those small increases add up over a year. If you don’t take action, this winter could be one of the most expensive yet.
The good news is that fixed energy tariffs in the UK are back and better than before. Many current deals are below the new cap, offering savings for winter 2025. This is a great chance to save £292 on energy bills by switching your tariff today. These savings are real and available for households willing to make the change.
How the Energy Price Cap Works (and Why It Matters)
The energy price cap does not set a limit on your total bill. It only limits the rates you pay for energy and the fixed charges if you have a standard variable tariff. If you use more energy than average, your bill could still be much higher than the £1,755 estimate.
The cap aims to protect consumers from high prices in unregulated markets, but it doesn’t guarantee the best deals. Families and homes with electric heating use more energy and are at greater risk with standard variable tariffs. During colder months, these households will see much higher bills.
Being on a variable tariff is risky. The price cap doesn’t ensure lower costs; it just stops prices from rising too quickly. That’s why we suggest looking at your options and fixing your energy tariff before winter. Think of it as a way to protect your finances.
Fixed vs Variable Energy Tariff: What You Need to Know
A fixed energy tariff keeps your rate the same for a set time, usually 12 to 24 months. This means you won’t face surprises, even if wholesale prices rise. In contrast, a variable tariff changes with market rates and regulations. It can be cheaper during low prices but more risky when prices go up.
During uncertain times, like now, fixed tariffs offer peace of mind. With the Ofgem price cap increase coming in 2025, fixed deals can protect you from sudden winter price hikes. Many suppliers are currently offering rates lower than the new cap, making this a smart financial choice. You also get the benefit of consistent bills, which helps you manage your budget better.
It’s much easier to plan when your utility bills don’t change dramatically. This stability supports your finances and lowers stress. Switching to a fixed tariff is a simple change that can lead to significant benefits.
How to Switch Energy Supplier in the UK
Switching energy suppliers in the UK is easier than ever. You don’t need to call your old provider or fill out paperwork. Just follow these steps:
- Compare prices on reliable comparison websites.
- Enter your usage or bill information for accurate quotes.
- Choose the cheapest energy deals that fit your needs.
- Sign up, and your new supplier will take care of the switch.
The process is usually smooth and takes about 5 working days, with no interruption in your energy supply. You’ll enjoy simpler billing and bigger savings.
Some people worry about exit fees, but check your contract. You can switch without fees if you’re within 49 days of your current deal ending. If you’re outside that window, weigh the potential savings against any penalty fees. Often, the savings are worth it.
The Best Fixed Energy Deals 2025 UK
Right now, over 27 fixed-rate tariffs are cheaper than the October price cap. Some of these are tracker deals that change slightly but usually remain cheaper than standard variable tariffs. Others are traditional fixed deals that provide stable rates for a long time.
By switching now, you could save a lot on your energy bills by winter 2025. In fact, people who switch today can save about £292 each year, money that can go towards essentials, savings, or even services like VAT Return Services in London.
Take some time to look at providers you haven’t considered before. New companies often offer better prices and customer service. There are also green energy providers that deliver clean energy at competitive rates, helping you align your finances with your values.
What to Do Before Energy Prices Rise
Act quickly. Fixed energy tariffs may soon vanish or become less appealing as more people switch. Here’s what to do:
- Check your current energy deal.
- Find out how many days are left on your fixed contract.
- Compare rates and switch if you have less than 49 days remaining.
- Use a switching calculator to see your potential savings.
Also, think about your energy use at home. Are your appliances efficient? Does your heating system need servicing? A well-performing home uses less energy, saving you money.
Remember, not acting could cost you an extra £76 each month during winter. That’s money you could use for holiday shopping, saving, or easing everyday expenses.
Why Clarkwell & Co. Cares About Your Energy Bill
We’re not energy providers, but we care about your household finances. Every financial choice affects your overall economic health. If you pay too much for gas and electricity, it can hurt your budget and savings.
At Clarkwell & Co., we offer bookkeeping services in London to track all your expenses, including utilities. Knowing your exact spending helps you plan and budget better. We help clients use this information to make smart decisions about bills like energy.
As a trusted accounting firm in London, we also understand the tax rules and deductions related to home offices or rental properties with utility costs. Being informed about your bills can lead to better choices and long-term financial stability.
How to Save on Electricity and Gas Bills in the UK
Here are some simple tips to lower your electricity and gas bills in the UK, aside from changing your tariffs:
- Use smart thermostats for better heating control.
- Seal windows and doors to keep heat in.
- Run dishwashers and washing machines with full loads.
- Unplug electronics when you’re not using them to save energy.
Also, switch to LED lights, install draught excluders, and choose energy-efficient appliances when replacing old ones. If you qualify, look for government grants or incentives for insulation or solar panels.
Small daily changes can make a difference, too. Lowering your thermostat by 1°C can cut your heating bill by up to 10%. Dress warmly, use blankets, and be careful with energy use during peak times.
Why You Should Act Now
The cost of living is still high, and while energy prices may feel out of your hands, your energy plan is not. Taking action now to secure a cheaper energy deal could be your best financial decision this season.
Acting quickly allows you to find the lowest energy plans for UK households, shield yourself from rising winter bills, and keep your budget on track.
If you want to understand how energy savings fit into your overall finances, reach out to our team at Clarkwell & Co. We provide a complete approach to managing household and business finances, including budgeting, bookkeeping, and helpful advice to help you succeed.
This season, choose control over chaos and savings over surprises.
