Energy, mortgages, house prices and other financial changes to watch out for in 2025

From energy bills to mortgages and savings rates, we look at what 2025 could mean for your finances.

It’s fair to say that we could be in for a rocky road in 2025, with already struggling Brits set to be hammered even harder.

Data from Sky News has revealed that the typical household could see major bills soar by almost £270 by April.

But what exactly do the next 12 months have in store for our key bills?

Let’s take a closer look…

Energy (more pain to come in April)

Although we’re only in early January, we’ve already been hit with a 1% rise to the Energy Price Cap, with the typical household now paying £1,738 per year.

This is an increase of £21 from October to December in 2024.

As the BBC reports, our gas and electricity bills are now approximately 50% higher than pre-covid levels.

While bills had been predicted to come down in April until just a few weeks ago, it seems this relief is no longer on the cards.

Energy market experts Cornwall Insight now expect the Price Cap will increase by almost 3% to £1,785.

While experts predict a slight drop in July, 2025 has already proven that we can’t take anything for granted.

How to cut your energy bills

Savings rates (set to plummet)

It goes without saying that 2024 wasn’t a great year for those looking to earn a return on their cash.

Many providers slashed rates following the Bank of England’s cuts to the Base Rate, with rates falling from 5.25% to 4.75% during 2024.

Cuts followed on savings products across the board – from easy-access accounts to in-credit rates on current accounts.

For example, AJ Bell found that the typical one-year savings bond fell from 4.9% to 4.1% last year.

And with the Bank of England widely predicted to make four more cuts in 2025, it is likely that returns for savers will fall further during the next 12 months.

James Blower, founder of the Savings Guru site, predicted that top easy access rates could fall to 3.6% by the end of this year.

At present, the market-leading rate is 4.85% from Atom Bank.

Blower also predicted easy-access ISA rates could be approximately 3.8%.

The current top rate is 5% from Moneybox.

Mortgages (a positive start to the year)

The past 12 months were turbulent for the UK’s 600,000 mortgage borrowers, with a rollercoaster of rate changes from major lenders.

Much of this volatility was due to factors such as uncertainty over Bank of England decisions.

Geopolitical instability over events such as the UK and US elections didn’t help.

But will 2025 be any better (or at least more stable?)

Potentially, yes. According to UK Finance, we can look forward to “a gradual improvement in mortgage affordability” over the next 12 months.

To be cautiously optimistic, it has been a positive start for homeowners in 2025.

So far, Halifax has cut rates for remortgages by up to 0.35%, with offers falling by 0.15%.

Likewise, Leeds Building Society has cut rates by 0.21%.

House prices (a mixed bag across regions)

Many of us have the same question at the start of any new year: what will happen to the value of my home?

According to the latest analysis from Nationwide, house prices are set to rise between 2% and 4% in 2025.

Of course, not all parts of the UK are equal.

House prices in Scotland and northern England will experience the fastest rise during 2025, research from estate agents Savills has found.

In contrast, property in the South West and East of England is set for the slowest growth, according to Savills.

The research suggests that prices in Scotland and the North of England will surge twice as fast as those in the South West and the East.

Supermarket deals (unexpected price drops)

For most of us, supermarket prices will be one of the biggest ones to watch this year.

Many within the industry had expected price hikes during 2025.

As part of her Budget speech, Rachel Reeves announced a 1.2% increase in NI payments for employers.

As a result, the bosses of several major supermarkets, including Sainsbury’s and Marks & Spencer suggested they would need to pass these hikes onto shoppers.

This led many of us to fear for the price of our weekly shop.

Interestingly, however, the new year has started with a raft of price cuts from major supermarkets.

Asda, for example, has announced it will reduce prices on more than 2,500 products.

Latest cheap supermarket offers

Council Tax (hikes already on the way)

Following the Government’s decision to freeze the cap on Council Tax hikes, most Local Authorities will likely increase our bills by 4.99% for the 2025/26 tax year.

This is the maximum a council can increase bills without requiring a referendum.

According to predictions, this will add £109 to the average bill for a Band D property in England and Wales.

Several councils, including Herefordshire and Buckinghamshire, have already hinted they will increase bills by the full 4.99%.

Opinion: 5 reasons the Council Tax system is broken

Have your say

What do you expect from your finances in 2025? Do you have any particular worries or do you see any bright spots on the horizon?

We’d love to hear your thoughts in the comments below.