Energy costs in the UK are set to rise again, as the energy price cap will increase by 12% starting January 1, 2025. The energy regulator Ofgem announced this adjustment.
The average household’s annual energy bill will rise to 1738 euros, reflecting an increase of 21 euros from the previous cap of 717 euros.
The energy price cap governs the maximum amount suppliers can charge for each gas and electricity unit and is reviewed quarterly. It affects approximately 26 million households across England, Wales, and Scotland on standard variable tariffs.
This cap is designed to protect consumers from excessive charges while ensuring that energy suppliers can cover their costs.
Dame Clare Moriarty, Chief Executive of Citizens Advice, expressed concern regarding the rising costs, stating that many households are already struggling with debts to their energy suppliers.
She warned that this price increase could push more families into financial distress as they face tough choices during the winter months.
Ofgem has encouraged consumers to explore their options in the energy market. With around 1.5 million households switching tariffs in recent months, there are potential savings of up to 140 euros available for those willing to shop around for better deals.
British Gas and other suppliers have also issued warnings regarding smart meters. Customers using smart meters may risk overpaying if they do not regularly submit their meter readings.
British Gas advised customers on variable tariffs to ensure they provide accurate readings to avoid unexpected charges.
Elsie Melville, energy expert at Uswitch, said, “Customers who don’t have a smart meter should aim to submit their readings before or on Wednesday, 1 January, so their supplier has an updated and accurate view of their account.
If you leave it any later than this, then some of your December energy usage could end up being estimated and therefore charged under the higher rates.”
However, with government support measures being reduced or phased out, many households may find it increasingly difficult to manage their energy expenses moving forward.
As January approaches, consumers are urged to stay informed about their energy usage and consider switching tariffs or providers to mitigate the impact of these rising costs.
Cornwall Insight predicts the price cap will rise by 1% gain in April to 1762 euros. This would mark a theory consecutive increase for households on default tariffs.
This is following the 1% rise in January and a 10% increase in October.
