The price of Brent crude rose by more than 3% in a single day last week – the biggest jump since the Ukraine invasion began in 2022. That spike was triggered by a US airstrike in Iraq that killed a senior Iranian general, escalating a conflict that the UK government has so far refused to call a war. For British homeowners, the immediate consequence is simple and brutal: higher energy bills are coming.
As reported by The Independent, the UK energy market is already pricing in the disruption. Wholesale gas prices – which still determine the bulk of household electricity costs – have risen 15% since the start of the year. The price cap, set by Ofgem every quarter, will almost certainly rise again in April. The only question is how much.
Who pays, and how much
The average UK household uses about 12,000 kWh of gas and 2,900 kWh of electricity per year. At current wholesale rates, analysts at Cornwall Insight estimate the April price cap could hit £1,850 – a rise of roughly £200 from the current £1,660. That’s not a forecast; it’s a floor. If oil prices stay elevated or rise further, the cap could exceed £1,900.
Households on standard variable tariffs – roughly 80% of UK homes – will absorb the full impact. Those on fixed deals expiring soon face a shock: the cheapest fixes available today are still 10-15% above the current cap. The catch is that fixing now locks in a rate before the next cap rise. Energy Helpline data suggests a typical fix at £1,720 could save £130 compared to waiting until April.
But the real pain is uneven. Homes with electric heating – often in rural areas or off-gas-grid properties – are disproportionately exposed because electricity prices track gas more closely than oil. A 3-bed semi using storage heaters could see its annual bill jump by £250 or more.
What this means for your EPC and upgrade plans
Every pound added to energy bills makes the case for efficiency upgrades stronger. The Energy Saving Trust calculates that loft insulation (costing £300-£400) saves about £225 a year on a typical semi. Cavity wall insulation (£500-£700) saves roughly £200. Those payback periods shrink dramatically when bills are rising.
Solar panels, which cost around £5,000-£6,000 for a standard 3.5 kW system, now generate savings of £500-£600 per year – and rising. Heat pumps, though expensive upfront (£7,000-£13,000 with the Boiler Upgrade Scheme grant of £7,500), become more attractive when the counterfactual is a gas boiler running on expensive wholesale gas. The grant brings the net cost down to zero or near-zero for many homes, and running costs are typically lower than gas at current prices.
The government’s Great British Insulation Scheme, launched in 2023, offers free or subsidised insulation for low-income homes. But eligibility is narrow: only households with an EPC rating of D or below and in council tax bands A-D qualify. The scheme has been slow to roll out – only 15,000 homes had been treated by November 2024, against a target of 300,000.
The political blind spot
What this crisis exposes is the UK’s continued vulnerability to global fossil fuel shocks. The government’s own Climate Change Committee has warned repeatedly that the UK’s reliance on imported gas leaves households exposed to price spikes. Yet the current administration has backtracked on heat pump targets and delayed the phase-out of gas boilers by a decade.
Every pound spent on insulating a home or installing a heat pump is a pound that stays out of the pockets of oil producers and gas traders. The Iran crisis shows energy security is not a foreign policy abstraction – it lands on your doormat, on your bill, every quarter.
Households on standard variable tariffs should fix their energy deal before the April cap rise. Those with expiring fixes should compare rates now, not wait. And anyone planning an upgrade should treat the current crisis as a signal: the cheapest energy is the energy you don’t use. Start with a free home energy audit from the Energy Saving Trust, then prioritise insulation. The next price cap announcement is due on 25 February. You have two months to act.
Frequently Asked Questions
Not immediately, but the impact will show up in the next Ofgem price cap announcement, expected in February for implementation in April. Wholesale prices have already risen, so your bill will increase unless you fix a deal before then.
The most effective long-term protection is reducing energy demand through insulation, solar panels, or a heat pump. In the short term, fixing your energy tariff now can lock in a lower rate before the next cap rise. Check comparison sites and act before the April change.
