Energy bills are expected to see a slight increase this winter following the confirmation of a new price cap by Ofgem. The average annual household energy bill is projected to rise by 0.2% starting in January, contrary to previous analyst predictions of a decrease.
Ofgem anticipates that households with average energy consumption paying through direct debit will witness their yearly bill climb from £1,755 to £1,758. For those using pre-payment meters, the price cap will increase from £1,707 to £1,711, and for bill payers, it will rise from £1,890 to £1,894 annually.
Despite the new price cap being 2% lower or £37 less than the previous year, energy bills remain significantly higher than previous periods. It is essential to note that the price cap limits the charges for unit rates of gas and electricity, along with standing charges, rather than capping the total bill amount.
The latest price cap, effective from January 1 until March 31, reflects government policy costs and operational expenses related to initiatives like the Sizewell C nuclear project and the Warm Home Discount scheme. Ofgem emphasized the importance of exploring different tariffs and payment methods to potentially reduce energy costs.
Energy consumers are encouraged to consider switching to more cost-effective payment options, like direct debit or smart pay-as-you-go. While wholesale energy prices are stabilizing, Ofgem continues to collaborate with authorities and industry partners to promote clean energy and minimize dependence on international energy sources.
