Energy bills will rise again in the new year as Ofgem price cap increases
'This price rise will come at the worst time of year for households, who will be using more energy at home during one of the coldest points of the winter.'
The cost of energy bills is set to increase by 5% in the new year, Ofgem is set to announce.
The energy regulator will announce its latest price cap on Thursday, as it appears hopes for relief from the cost of living crisis have been put on hold.
The timing of the energy cap price rise coincides with the coldest part of winter, when people are using the most energy to keep their homes warm over Christmas before moving into the chilly new year period.
Energy consultancy Cornwall Insight predict the cap will increase from the current £1,834 for a typical dual fuel household to £1,931 – a 5% jump to take effect from January to March.
They predict the typical bill will then fall to £1,853 at the start of next April, but won’t drop below today’s level until next July.
Cornwall Insight said recent milder weather was helping to bring down gas prices, and this could help reduce bills next year if continued – but ‘sharp price falls are not expected’, it said.
Dr Craig Lowrey, principal consultant at Cornwall Insight, said: ‘An unstable wholesale energy market, coupled with the UK’s reliance on energy imports, makes it inevitable that energy bills will rise from current levels.
‘This leaves households facing yet another winter with bills hundreds of pounds higher than pre-pandemic levels, and affordable fixed deals few and far between.’
‘The King’s Speech acknowledged that it is our exposure to volatile international energy markets that has led to higher and less predictable bills.
‘While we continue to advocate for immediate targeted support for vulnerable consumers, it is evident that the only enduring solution lies in transitioning the UK away from the influence of global energy prices towards sustainable, domestically sourced energy.’
Emily Seymour, energy editor at consumer magazine Which?, said: ‘If you are concerned about struggling to pay higher bills, don’t suffer in silence – there is help available.
‘Speak to your energy provider about a payment plan you can afford and check to see if you qualify for any government schemes.
‘We’d recommend that everyone without a smart meter takes a meter reading on or close to December 31 to make sure they don’t overpay for any energy used before the new price cap takes effect.
‘Submitting meter readings on a regular basis is a good idea, and makes sure you are billed correctly.’
Richard Neudegg, director of regulation at Uswitch.com , said: ‘This price rise will come at the worst time of year for households, who will be using more energy at home during one of the coldest points of the winter.
‘The price cap is no longer fit for purpose, and the system needs reforming to create a more competitive market, which also protects households.’
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