Household bills are set to increase in January, as the energy price cap is due to rise by an average of £1.75 per month from the start of the year. This announcement came following Ofgem’s update of the energy price cap, effective from January 1 to March 31. The new cap will see an average yearly cost of £1,738 for a typical dual-fuel household paying via direct debit. This marks an average rise of 1.2% per household, amounting to £21 annually. Despite the increase, bills are expected to be around 10% lower compared to the same period last year.
The impact of the price hike will vary among households based on their individual fuel consumption levels. While there is a marginal decrease in standing charges—1p for gas and 2p for electricity—the unit price for gas is set to increase by 10p per kilowatt hour (KwH), equalling a 1.6% rise. Electricity’s unit price will also go up by 36p per KwH, reflecting a 1.5% hike. To estimate how much your bill might increase from January, you can utilize the energy bills calculator provided.
Ofgem’s Director General of Markets, Tim Jarvis, highlighted the importance of exploring various tariffs to potentially lower energy costs amidst fluctuations in international markets. Jarvis emphasised the significance of building a renewable, home-grown energy system to enhance cost stability. He advised customers struggling with bills to engage with their supplier for assistance and to consider switching to more affordable tariff options.
While the energy price cap remains relatively stable with the latest adjustment, the ongoing volatility in international markets could impact energy costs in the future. Jarvis urged consumers to remain vigilant and proactive in managing their energy expenses. With more tariff options entering the market, customers are encouraged to shop around to secure the best deals suitable for their needs.
The upcoming rise in household bills serves as a reminder of the challenges many households face in managing their energy expenses. As the cost of energy continues to fluctuate, it is crucial for consumers to stay informed and seek out cost-effective solutions. By staying engaged with market developments and exploring available tariff options, households can better navigate the changing landscape of energy prices.
In light of the impending increase in energy bills, Ofgem’s advice to customers is to stay informed, seek assistance when needed, and explore ways to optimise their energy expenditure. With a focus on long-term sustainability and cost efficiency, households can proactively manage their energy bills and adapt to evolving market conditions.
Overall, the rise in household bills underscores the importance of monitoring energy expenses and seeking out cost-saving opportunities. By remaining proactive and informed, consumers can navigate the shifting energy landscape and make informed decisions to mitigate the impact of rising costs. As January approaches, households are encouraged to assess their energy usage, explore tariff options, and actively engage with their energy providers to manage their bills effectively.