Why electricity and gas prices are being separated – and what it could mean for your bills

The way we pay for energy is set to change.

At the moment, electricity prices are closely linked to gas prices. That means when gas becomes more expensive, electricity bills often go up too - even if the electricity itself comes from cheaper, cleaner sources like wind or solar.

The government wants to change this. The aim is to reduce the link between gas and electricity prices so that bills are less affected by changes in global gas markets.

It’s not a quick fix, but it could make a difference to how energy bills behave in the future.

How things work right now

Right now, gas has a big influence on the price of electricity.

Even if your electricity comes from renewable energy, the price you pay is still often set by gas. This is because gas is usually the most expensive way to produce electricity, so it ends up setting the price for the whole system.

So when gas prices rise, electricity prices usually follow. And when gas prices fall, electricity doesn’t always come down in the same way.

For households, that can feel frustrating. You might be trying to use greener energy, but your bill still moves up and down based on gas prices.

What the government wants to change

The government wants to “break the link” between gas and electricity prices over time.

Instead of electricity prices being pulled up and down by gas, more energy could be sold at fixed or more stable prices. The idea is to make the system less reactive to sudden changes in global gas markets.

There are also plans to look at how energy companies are taxed, with some of the money potentially used to support households with their bills.

Why is this change happening?

There are a couple of reasons for the change.

First, gas prices can change very quickly. They are affected by things like global conflict, such as the war in the Middle East, supply issues, and demand from other countries. When that happens, our energy bills can rise sharply, sometimes without much warning.

Second, we’re using more renewable energy than before. Wind and solar power are often cheaper to produce, but at the moment, households don’t always feel the benefit because electricity prices are still linked to gas.

The government wants to change that so cleaner energy can have more of a positive impact on bills.

What this could mean for your bills

In the short term, you are unlikely to notice much change. Energy bills will still depend on things like wholesale prices, government price caps, and how much energy you use.

Over time, the hope is that bills become more stable. That means fewer sudden jumps when gas prices rise, and a system that reflects cheaper renewable energy more fairly.

But this is a long-term change. It won’t bring immediate reductions in bills, and experts expect any impact to build slowly over the years.

Will this fix high energy bills?

On its own, no.

Energy bills are shaped by lots of things, including global fuel prices, how much energy is being used, and the overall cost of maintaining the energy system.

What this change is really trying to do is make the system less exposed to gas price spikes and more stable in the long run.

So it’s less about bringing bills down overnight, and more about reducing sudden rises in the future.

What should you do if you're worried about the cost of energy right now?

Changes like this can take time to make a difference. So if you’re worried about your energy bills right now or the prospect of rises in July, it’s important to know there is help available.

If you’re struggling, the first step is to speak to your energy supplier. They may be able to offer a payment plan that spreads the cost into smaller, more manageable amounts. Many suppliers also have hardship schemes or grants that can help reduce what you owe.

It can also help to check if you’re entitled to any extra support. This could include government schemes or discounts based on your income or circumstances.

If things still feel overwhelming, you don’t have to deal with it on your own. Debt advice is available, and speaking to someone can help you understand your options and feel more in control.

Even small steps can make a difference, and getting support early can help stop things from getting worse.