February 2025: A Spring Cap Rise and the Standing Charge Reckoning
Ofgem confirmed a sharp 6.4% rise in the April price cap and pressed ahead with reform of standing charges, including new low and zero standing charge tariffs. We unpack what February's announcements meant for advisors and their clients.
CAMB Editorial
Editorial Team
February brought a double dose of significance for the energy market. Ofgem confirmed that the price cap would rise again from April — a steeper increase than many had hoped for — while simultaneously advancing its long-running reform of standing charges. Together, the two announcements reshaped the conversation between advisors and their customers, sharpening the focus on not just how much energy costs, but how those costs are structured.
The April Rise in Context
The confirmed increase pushed the typical domestic bill to its highest level in a year, driven by elevated wholesale costs carried over from the cold winter. For the commercial market, the announcement reinforced a now-familiar dynamic: with the domestic cap climbing, supplier appetite for keen business pricing tightened, and the window for locking in favourable fixed terms began to feel narrower.
The Standing Charge Reckoning
Standing charges — the fixed daily cost a customer pays regardless of consumption — had become a lightning rod for frustration, particularly among low-usage households and small businesses. In response, Ofgem moved to require suppliers to offer tariffs with low or zero standing charges, giving customers a genuine alternative to the standard structure. For advisors, this expanded the toolkit considerably.
Match the structure to the customer
A zero standing charge tariff suits a low-consumption site, but typically carries a higher unit rate. For a high-usage customer, the opposite is true. The advisor's job is to model actual consumption and recommend the structure that genuinely costs less — not the one that simply looks cheaper.
An Opportunity to Demonstrate Expertise
The arrival of more varied tariff structures was, for the thoughtful broker or consultant, an opportunity rather than a complication. Customers faced with more choice need more guidance, and the advisor who can clearly explain the trade-off between unit rates and standing charges — and tie it to a customer's real usage pattern — demonstrates exactly the kind of value that price comparison alone cannot.
- Model each client's consumption before recommending a tariff structure
- Use the standing charge reforms as a prompt to review low-usage sites in particular
- Explain the unit-rate trade-off in plain language so customers understand the choice
- Treat greater tariff complexity as a chance to deepen the advisory relationship
Key Takeaways
- Ofgem confirmed a 6.4% rise in the April price cap to £1,849, the highest in a year
- Reform of standing charges advanced, with suppliers required to offer low and zero standing charge options
- Tariff structure became as important as headline price — particularly for low-usage sites
- Greater choice increased the value of clear, consumption-based advice
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