Energy Price Cap latest: bills forecast to rise slightly in January
Having initially predicted a slight reduction, influential analysts said the Energy Price Cap will now rise by £19.
Stretched households were dealt another blow this weekend after they were warned energy prices would likely rise again in January.
The Energy Price Cap is the maximum amount suppliers are allowed to charge customers per unit of energy.
It means the typical household currently pays £1,717 a year for their combined gas and electricity costs, having risen 10% in October.
Ofgem, the energy regulator, reviews this Cap every three months to reflect recent wholesale energy price changes.
The next revision will apply from January 2025 and will be announced this Friday (22 November).
Having looked at pricing trends, analysts at Cornwall Insight expect the regulator to increase the Price Cap slightly to £1,736.
As recently as September, the forecasters had been pricing in a slight cut to energy, so even a modest increase will be a bitter pill for households to take, especially given millions are already struggling to make ends meet.
Shop around for a cheaper energy deal with Uswitch and save up to £100 (opens in new page)
Many can’t afford to turn on the heating
Worrying research from price comparison site Uswitch, released last week before the latest forecast for energy price rises was published, warned that more than 1.7 million households would not be turning on the heating this Winter.
More than half of those who responded to its survey cited rising living costs as the reason for not heating their homes, while a quarter of pensioners pointed to the loss of their Winter Fuel Payment.
Read: how to sort your own Winter Fuel Payment
Clearly any increase in January, no matter how small, will have a huge impact on households that are already having to resort to extremes to avoid running out of money each month.
So what can you do if your energy bills are too high?
Switch, use less, get help
We’re at risk of sounding like a broken record on this, but the quickest and easiest step you can take is to switch to a cheaper energy deal.
Many energy suppliers offer fixed-rate tariffs that are notably cheaper than the Energy Price Cap.
In fact, Uswitch estimates a typical household will save £100 by switching to a cheaper deal. If you haven’t already done so, take a few minutes to lock into a cheaper deal now.
Once you’ve done that, it’s time to take steps to use less energy and, if you’re still struggling, look at what help you qualify for.
Read the following two guides for more information:
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Why aren't energy prices falling?
As we mentioned earlier, energy bills were initially forecast to fall slightly in January.
The reason why that hasn't come to pass is down to ongoing volatility in the global energy markets.
As Cornwall Insight noted in its latest analysis: "Given the price cap rise in October, many will have been hoping to see a fall in the cap for January.
"Unfortunately, forecasts show that prices will be staying relatively high for the remainder of Winter.
"The cap level is a reflection of a relatively volatile wholesale market, influenced by supply concerns tied to geopolitical tensions, maintenance on Norwegian gas infrastructure, weather disruptions, amongst other smaller factors.
"Despite prices stabilising in comparison to the past two years, the market remains very sensitive to global events. This is leaving prices substantially above historic averages.
The analysts did conclude with a note of optimism, suggesting prices might "drop slightly in April 2025 and again in October 2025".
Shop around for a cheaper energy deal with Uswitch and save up to £100 (opens in new page)
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