5% Rise in Energy Bills Poses “Added Pressure on Finances”

Office of Gas and Electricity Markets (Ofgem) announced the energy price cap is rising to 5% from January. 

Ofgem says the typical annual household bill will increase to £1,928. A rise of £94 for direct debit users starting this new year. 

The new average figure shows higher costs heading into the winter months. 

Dr Craig Lowrey, principal consultant at energy analysts Cornwall Insight, said: “Amid the cost-of-living crisis, the last thing households need is a rise in energy bills – especially going into the winter months.”

Those who pay every 3 months by cash and cheque will pay more than those using other payment methods.

Homes using prepayment meters also see a rise in their annual energy bill, to £1,960, up from £1,949, and still £32 more than direct debit customers.

The price of gas will be 7p per kilowatt hour (kWh), and electricity will be 29p per kWh.

Added Pressure

Citizens Advice said they are already “seeing more people than ever who can’t afford to top up their prepayment meter.”

The spike in energy bills means households will face “pressure on their finances this new year.”

Jonathan Brearley, chief executive of Ofgem, said, “It is important that customers are supported. We have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills.”

Ofgem said the Ukraine war is behind the rise of the UK’s energy. The problem is the UK’s dependency on gas and energy imports. 

 Dr Lowrey, said: “As we move through 2024, it’s not just the persistently high unit costs that will be a worry.

“The looming rise in electricity standing charges from April adds another layer to the equation.

“Without energy support measures in the autumn statement, consumers are likely to look at reducing energy usage to counteract high bills.

“We need a long-term strategy that reduces our dependence on imports of energy – particularly gas.

“By investing in domestic renewable energy sources, we can start to break free from the international market fluctuations and stabilize our energy prices for homes and businesses alike,” he added. 

For some families who may struggle paying bills, extra support is available like: 

Warm Home Discount Scheme and Ofgem: help with energy bills.