(kwh price uk) Guide to Electricity Costs in the UK (2025)

In 2025, electricity prices in the UK are a hot topic.

We’ve seen big changes in recent years, and the price cap introduced by Ofgem helps make sure we’re not paying more than we should.

But what does this all mean for your household bills? Let’s break it down simply.

What is the Electricity Price Cap?

The electricity price cap is the maximum amount that energy companies can charge you for each unit of electricity you use.

But, it’s important to know that this is not a cap on your total bill. The cap affects the price per unit of electricity, measured in kilowatt-hours (kWh).

From July 2025, the price for electricity will be capped at 25.73p per kWh for households using average amounts of energy.

For a typical household, this could mean paying £1,720 per year on average. But if you use more energy, you’ll pay more. If you use less, your bill will be lower.

What’s Included in Your Bill?

When we talk about the electricity price cap, we’re not just talking about the cost per unit of electricity. There’s also something called a standing charge. This is a fixed daily amount you pay just to have electricity in your home, regardless of how much you use.

From July 2025, the standing charge for electricity is 51.37p per day. This is a small but constant fee on top of the cost for the electricity you use.

Prices by Region

Electricity prices vary depending on where you live in the UK. For example, the price per kWh can be higher in some regions than others. Here’s a snapshot of the prices in different areas:

As you can see, some places like N Wales and Mersey have higher electricity rates, while Southern Scotland has some of the cheapest prices.

The Impact of Payment Methods

How you pay for your electricity also affects your bills. There are three main ways you can pay:

1. Direct Debit: This is usually the cheapest option. You pay a set amount each month, based on your usage.
2. Standard Credit: With this, you receive a bill every few months and pay after using the energy. It tends to be more expensive.
3. Prepayment Meters: You pay for your electricity in advance, often using a key or card to top up. It’s generally more expensive than paying by direct debit.

In 2025, direct debit is still the most affordable way to pay for electricity. Prepayment meters, while convenient, usually end up costing more over time.

How Has the Price of Electricity Changed?

Electricity prices in the UK have been rising steadily over the last few years, especially after the pandemic and during the energy crisis caused by the war in Ukraine. Here’s a quick look at the price changes:

• 2021: Electricity cost around 21.4p per kWh.
• 2022: The price jumped to 32.2p per kWh.
• 2023: Prices peaked at 33.6p per kWh.
• 2025 (July-September): Prices will drop to 25.73p per kWh.

While prices have fluctuated, we’re seeing a decrease from the highs of 2022 and 2023, which is good news for consumers.

What Does This Mean for Your Energy Bills?

If you use a typical amount of energy, you can expect to pay around £1,720 per year from July 2025. However, this will change based on your energy use. For instance:

• If you use more electricity than the typical household, your bill will go up.
• If you use less, your bill will be lower.

It’s important to keep an eye on your usage and try to be energy-efficient where possible. Small changes, like turning off lights when you leave a room or using energy-efficient appliances, can make a big difference over time.

How to Save on Your Electricity Bills

Even with the price cap in place, there are ways to keep your electricity bills under control:

1. Switch Energy Providers: Prices may differ slightly between providers, so it’s worth shopping around.
2. Consider Fixed Tariffs: If you lock in a fixed rate, you won’t have to worry about prices increasing for the next year or more.
3. Use Less Energy: Make small changes around the house to use less electricity. For example, switching to LED bulbs, using appliances during off-peak hours, or even investing in solar panels can all reduce your overall consumption.
4. Review Your Payment Method: If you’re not on a direct debit plan, consider switching to it. This is usually the cheapest way to pay.

Looking Ahead

The electricity market in the UK remains unpredictable. Prices can change based on factors like global energy demand, weather, and political events.

However, with the price cap in place and the government’s continued efforts to regulate prices, households should have some stability.

In 2025, electricity prices are still higher than they were a few years ago. But with careful planning and smart decisions about your energy use, you can manage your bills and avoid unnecessary costs.

Conclusion

The electricity price cap in the UK provides a much-needed safeguard against rising energy costs.

While prices vary by region and payment method, the good news is that they are set to decrease in the third quarter of 2025.

If you’re careful with your energy usage and make the right choices about your payment method, you can keep your electricity bills under control.

Staying informed about price changes and switching providers when necessary will help ensure you’re getting the best deal possible.