The average annual energy bill will increase to £1,849 from April as the industry regulator Ofgem increases the price cap for the third time in a row.

When compared to prices over the last three months, the new figure represents a 6.4% a year – or £9.25 per month – increase in the typical sum the vast majority of households face paying for gas and electricity when using direct debit.

It also means typical bills will be £159 more expensive than last year’s. It’s the first time the April cap has risen above the January cap since quarterly updates began in 2022.

Only those on fixed-rate deals – around eleven million homes – will see no change until their current term expires. An extra four million homes fixed the cost of energy units since November, Ofgem said.

The price cap limits the amount suppliers can charge per unit of energy and is revised every three months.

Energy debts have reached a record high, Ofgem also said.

Why are prices going up?

Ofgem’s energy price cap decision comes as a consequence of rising wholesale gas prices since the start of the year.

Europe has seen a price spike due to strong demand in recent months, driven by colder weather compared to recent years.

That, in turn, has sapped stockpiles and even prompted a warning last month from the owner of the UK’s largest gas storage facility that levels were “concerningly low”.

The UK is heavily reliant on gas for its home heating and also uses a significant amount for electricity generation.

It’s this reliance that has caused the increased cost, the regulator said. Only a small portion of the increase came from inflation and policy costs.

The government is investing heavily in more UK-based renewable energy, such as wind and solar farms, to ease the country’s current reliance on gas imports, targeting 95% clean power across the electricity grid by 2030.

When will prices fall?

Market analysts anticipate natural gas costs will remain elevated in the coming months due to Europe’s need to restock ahead of next winter.

But the prospect of a settlement between Russia and Ukraine has brought prices down slightly.

Bills are expected to fall in July.

Trusted forecasters Cornwell Insight see a slight fall to £1,756 as likely, but they caution that the forecasts will be changed to reflect market volatility in the coming months.

Widespread bill rises

Energy bills are just one of the cost increases consumers can expect in April.

Council tax and water bills are to rise then. Some people may be in a better position to meet those costs as the minimum and living wages will rise then.

For employers, their national insurance contributions also go up during the month.

Did you know there’s a critical product – one without which we’d all be dead – which Europe is actually importing more of from Russia now than before the invasion of Ukraine?

It might feel a bit pointless, given how much chat there is right now about the end of the Ukraine war, to spend a moment talking about economic sanctions and how much of a difference they actually made to the course of the war.

After all, financial markets are already beginning to price in the possibility of a peace deal between Russia and Ukraine. Wholesale gas prices – the ones which change every day in financial markets as opposed to the ones you pay at home – have fallen quite sharply in the past couple of weeks. European month-ahead gas prices are down 22% in the past fortnight alone. And – a rare piece of good news – if that persists it should eventually feed into utility bills, which are due to rise in April, mostly because they reflect where prices used to be, as opposed to where they are now.

But it’s nonetheless worth pondering sanctions, if for no other reason than they have almost certainly influenced the course of the war. When it broke out, we were told that economic sanctions would undermine Russia‘s economy, making it far harder for Vladimir Putin to wage war. We were told that Russia would suffer on at least four fronts – it would no longer be able to buy European goods, it would no longer be able to sell its products in Europe, it would face the seizure of its foreign assets and its leading figures would face penalties too.

The problem, however, is that there has been an enormous gap between the promise and the delivery on sanctions. European goods still flow in large quantities to Russia, only via the backdoor, through Caucasus and Central Asian states instead of directly. Russian oil still flows out around the world, though sanctions have arguably reduced prices somewhat.

The upshot is Russia has still been able to depend on billions of euros of revenue from Europe, with which it has been able to spend billions of euros on components sourced, indirectly, from Europe. Its ability to wage war does not seem to have been curtailed half as much as was promised back in 2022. That in turn has undoubtedly had an impact on Russia’s success on the battlefield. The eventual peace deal is, at least to some extent, a consequence of these leaky sanctions, and of Europe’s reluctance to wage economic war, as opposed to just talking about it.

A stark example is to be found when you dig deeper into what’s actually happened here. On the face of it, one area of success for sanctions is to be seen in Europe’s gas imports. Back before the conflict, around half of all the EU’s imported gas came from Russia. Today that’s down to around 20%.

But now consider what that gas was typically used for. Much of it was used to heat peoples’ homes – and with less of it around, prices have gone sharply higher – as we are all experiencing. But the second biggest chunk of usage was in the industrial sector, where it was used to fire up factories and as a feedstock for the chemicals industry. And that brings us back to the mystery product Europe is now importing more of than before the invasion.

One of the main chemicals produced from gas is ammonia, a nitrogen-based chemical mostly used in fertilisers. Ammonia is incredibly important – without it, we wouldn’t be able to feed around half of the population. And since gas prices rose sharply, Europe has struggled to produce ammonia domestically, turning off its plants and relying instead on imports.

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Which raises a question: where have most of those imports come from? Well, in the UK, which has imposed a clear ban on Russian chemical imports, they have come mostly from the US. But in Europe, they are mostly coming from Russia. Indeed, according to our analysis of European trade data, flows of nitrogen fertilisers from Russia have actually increased since the invasion of Ukraine. More specifically, in the two-year pre-pandemic period from 2018 to 2019, Europe imported 4.6 million tonnes, while the amount imported from Russia in 2023-24 was 4.9 million tonnes.

It raises a deeper concern: instead of weaning itself off Russian imports, did Europe end up shifting its dependence from one category of import (gas) to another (fertiliser)? The short answer, having looked at the trade data, is a pretty clear yes.

Something to bear in mind, next time you hear a European leader lecturing others around the world about their relations with Russia.

Waspi campaigners have threatened legal action against the government unless it reconsiders its decision to reject compensation.

In December, the government said it would not be compensating millions of women born in the 1950s – known as Waspi women – who say they were not given sufficient warning of the state pension age for women being lifted from 60 to 65.

It was due to be phased in over 10 years from 2010, but in 2011 was sped up to be reached by 2018, then rose to the age of 66 in 2020.

A watchdog had recommended that compensation be paid to those affected, but Sir Keir Starmer said at the time that taxpayers could not afford what could have been a £10.5bn package.

On Monday, the Waspi campaign said it had sent a “letter before action” to the Department for Work and Pensions (DWP) warning the government of High Court proceedings if no action is taken.

Angela Madden, chair of Waspi (Women Against State Pension Inequality) campaign group, said members will not allow the DWP’s “gaslighting” of victims to go “unchallenged”.

She said: “The government has accepted that 1950s-born women are victims of maladministration, but it now says none of us suffered any injustice. We believe this is not only an outrage but legally wrong.

“We have been successful before and we are confident we will be again. But what would be better for everyone is if the Secretary of State (Liz Kendall) now saw sense and came to the table to sort out a compensation package.

“The alternative is continued defence of the indefensible but this time in front of a judge.”

The group has launched a £75,000 CrowdJustice campaign to fund legal action, and said the government has 14 days to respond before the case is filed.

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In the mid-1990s, the government passed a law to raise the retirement age for women over a 10-year period to make it equal to men.

The Conservative-Liberal Democrat coalition government in the early 2010s under David Cameron and Nick Clegg then sped up the timetable as part of its cost-cutting measures.

In 2011, a new Pensions Act was introduced that not only shortened the timetable to increase the women’s pension age to 65 by two years but also raised the overall pension age to 66 by October 2020 – saving the government around £30bn.

About 3.6 million women in the UK were affected – as many complained they weren’t appropriately notified of the changes and some only received letters about it 14 years after the legislation passed.

While in opposition, Rachel Reeves, now the chancellor, and Liz Kendall, now pensions secretary, were among several Labour MPs who supported the Waspi women’s campaign.

The now-Chancellor said in a 2016 debate that women affected by the increase in state pension age had been “done and injustice” and urged the government to “think again”.

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A government spokesperson said: “We accept the Ombudsman’s finding of maladministration and have apologised for there being a 28-month delay in writing to 1950s-born women.

“However, evidence showed only one in four people remember reading and receiving letters that they weren’t expecting and that by 2006, 90% of 1950s-born women knew that the state pension age was changing.

“Earlier letters wouldn’t have affected this. For these and other reasons, the government cannot justify paying for a £10.5 billion compensation scheme at the expense of the taxpayer.”