How much your energy bill will rise by after Ofgem price cap increase
The average household energy bill will be £1,738
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Your support makes all the difference.The energy price cap will increase in January for a second consective time, raising bills by 1.2 per cent. The new figure will bring the average household energy bill to £1,738.
This is £21 more than the October to December cap of £1,717. The new cap, lasting from January to March 2025, will be £190 cheaper than the cap during those months in 2024.
The energy price cap is the maximum amount energy suppliers can charge for each unit of energy for those on a standard variable tariff, which includes most households. It is expressed as an annual bill for an average home.
Tim Jarvis, director general of markets at Ofgem, said: “While today’s change means the cap has remained relatively stable, we understand that the cost of energy remains a challenge for too many households.
“However, with more tariffs coming into the market, there are ways for customers to bring their bill down so please shop around and look at all the options.”
The regulator sets the price limit for each unit of energy used based on several factors including wholesale energy prices – the amount energy providers pay for gas and electricity before supplying it to households.
Mr Jarvis adds that the UK’s reliance on “volative international markets” is the leading reason for fluctuations in the price of energy, citing ongoing events in Russia and the Middle East.
Rising energy bills were recently cited as a major factor in inflation creeping back up above the Bank’s 2 per cent target in October, reaching an unexpected 2.3 per cent.
Craig Lowrey, principal consultant at Cornwall Insight, said: “Supply concerns have kept the market as volatile as earlier in the year and additional charges have remained relatively stable, so prices have stayed flat.
“While we may have seen this coming, the news that prices will not drop from the rises in the autumn will still be disappointing to many as we move into the colder months.”
Ofgem is currently considering the future of price protection, including the suitability of the price cap and a potential permanent ban on so-called acquisition tariffs – cheaper prices for new customers to lure them away from their existing supplier.
Charities have voiced their concerns over another price rise, with National Energy Action saying that “targeted government support” has now become essential.
David Southgate, policy manager at disability equality charity Scope, said: “This is a bitter pill to swallow for the many disabled people who face sky-high bills because they have no choice but to use more energy.
“Life costs a lot more when you’re disabled, because of needing to use more heating to stay warm and healthy, or charging vital equipment like wheelchairs and breathing machines.
“Our disability energy support services are hearing from disabled people who have cut back everything they can and racked up huge amounts of debt.
“The Government urgently needs to step in and bring in discounted energy bills for disabled people.”
Secretary of State for Energy Security and Net Zero Ed Miliband said: “The rise in the energy price cap will cause concern for families struggling with the cost of living. That is why the Government will do all we can to help people.
“We are taking action to insulate homes, providing the Warm Home Discount to three million families, driving increased take up of pension credit, and working with suppliers to ensure there is help available for the most vulnerable customers.
“As long as Britain remains exposed to the rollercoaster of global fossil fuel markets, we will be vulnerable to energy price rises over which we have no control.
“The Government’s clean energy mission is the only way to take back control of our energy, with cheaper and more secure power, out of the grip of dictators like Putin.
“That is why we are acting at speed on this mission to give families the energy security they deserve. Every wind turbine and solar panel we install, every home we insulate will help to protect consumers and bring down bills once and for all.”
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