Martin Lewis: The 6.4% April Energy Price Cap rise is really 2% to 9% – what will you pay?

ITV's The Martin Lewis Money Show Live – Tuesday 25 February 2025

From The Martin Lewis Money Show Live on Tuesday 25 February 2025 courtesy of ITV. All rights reserved. Watch the full episode on ITVX.

Transcript of what Martin said on the show...

Martin Lewis: "6.4% is the average rise. But I want you to look at this graph (see below). Here we go.

"So, what I've done today, is I've plotted the impact of the rise on different payment amounts.

"Now look, prices are regional. It's really important to understand that they’re regional. This is based on the West Midlands, for someone who uses 60% electricity and 40% gas; it's just a rough analysis of what's going on.

"So [for] very low usage, under £100 - because the standing charge is going down on electricity and not much on gas - they're only going to see a 2%, 3% or 4% rise.

"It starts to middle out for someone paying around £150 a month. That's where you're paying the 6.4%. But if you're a higher user, you'll see it goes up and up and up.

"And right up here, the really big users, they're going to see a 9% rise in April. So not only do they pay more anyway because a percentage rise in a bigger amount is larger. The actual percentage rise is bigger for higher users.

"So that's the real impact. This blunt 6.4% doesn't paint the picture. That's a much better picture of what's likely to happen.

"And let me just finish off. At the end. I mentioned it there. This time we've seen really big regional variances in the prices. I talked about the electricity standing charge going down. Not if you're in north west Wales, not if you're in London.

"Then the standing charge is actually going up on electricity. So you do need to look at what's going to be happening to you. And there are some calculators out there that can help you."

Why standing charges vary depending on where you live

Jeanette Kwakye, Martin's co-host: "We've got a question just on that from Sandy about that regional variation, 'Martin, can you tell me why standing charges are lower in London than in the north east of Scotland? Surely if the green energy is produced here, then the standing charges should be lower than in the south of England?'."

Martin: "Normally I'd answer it, but I've got someone else who can answer that one; Jonathan, CEO of Ofgem. Why do standing charges vary so much around the country? Scotland; it’s where all the energy's generated. Why isn't it cheaper?"

Jonathan Brearley, chief executive of energy regulator Ofgem: "Well, Sandy, where you live in Scotland, the infrastructure you need to get the energy to your house is very different from the infrastructure we need in somewhere like London. So look, what does the standing charge pay for?"

Martin: "Why is it different?"

Jonathan: "So, it pays for the networks that bring electricity to your house and the pipes that bring the gas to your house.

"Now, if you live in Scotland, people live quite far away from each other compared to in a city. Therefore, more network is needed and therefore the charges are higher. Now one thing we want to do – we've already said we might introduce a zero standing charge tariff, and I know we'll come to that..."

Plans are afoot to look into regional variations

Martin: "Definitely.

Jonathan: "We want to look at this regional variation. There's a bigger question..."

Martin: "I want to just say, because the boss of Octopus, Greg Jackson, he says people in Scotland, they live nearer the wind turbines, it should be cheaper for them and we're pricing it all wrong. Where are you on that?"

Jonathan: "So the Government are looking at changing the market so people in Scotland would get lower bills when the wind is being generated in Scotland.

"We are quite supportive of that change. So all of us want to see a system where we're no longer paying wind farms to turn off in the same place where energy charges are high. So we back that."

Martin: "Is it in your purview to change that, or is that Government?"

Jonathan: "So that's for Government. But we're helping them and absolutely will be implementing if they decide to make the change."

Martin: "Okay."