Energy bills are set to soar for millions of households from January following an increase to the price cap.
The price cap was raised by Ofgem in response to rising wholesale prices, which will result in an annual increase in average home energy bills of £94 starting in January.
According to the regulator, it was also caused by world events, especially the situation in Ukraine, and market volatility.
Starting on January 1, the price ceiling for a typical dual fuel family will increase from £1,834 to £1,928.
“This is a difficult time for many people, and any increase in bills will be worrying,” stated Chief Executive Jonathan Brearley.
However, this increase—roughly equivalent to the levels saw in August—comes from higher gas and electricity wholesale prices, which must be reflected in the prices we all pay.
“It is critical that consumers receive assistance, and we have made it plain to suppliers that we count on them to recognize and assist individuals who are having financial difficulties.
Positively, variety is returning to the market. Customers may take advantage of this by comparing the many tariffs that are now offered, which can provide them with the stability of a set rate or a more flexible plan that tracks below the price cap.
“People should weigh up all the information, seek independent advice from trusted sources and consider what is most important for them, whether that’s the lowest price or the security of a fixed deal.”
The maximum amount that suppliers may charge families in England, Wales, and Scotland for each unit of gas and electricity is limited by the energy price cap.
Those who consume more will pay more because the headline price cap number is an average across families rather than an absolute cap on bills.
