LONDON DAILY ARCHIVE
Households to Face Added Pressure as Energy Price Cap Set to Increase in January
Energy costs for UK households are set to increase in January, compounding existing financial burdens during the peak winter season.
23 November 2023 · 21:53 UTC
Covering 29 million homes in England, Wales, and Scotland, Ofgem's price cap sets maximum charges per unit of energy, but overall bills can rise with greater usage.
Come January, gas will cost 7p/kWh and electricity 29p/kWh. Users with prepayment meters will face yearly bills around £1,960, while quarterly payers can expect approximately £2,058. Daily standing charges for connection to services will stay at 53p for electricity and 30p for gas.
Energy analyst Dr. Craig Lowrey labels the price hike as particularly troubling with winter approaching, pointing to the UK's energy dependence and global market vulnerabilities as catalysts.
Ofgem's CEO, Jonathan Brearley, has urged providers to assist those struggling with their bills, highlighting customers like Roy Bridgewood from Manchester, who already faces significant energy debt and personal hardships.
As the cost of daily standing charges remains fixed amid rising fees, Ofgem is scrutinizing these charges and considering a £20 annual increase for direct debit payers to align with costs for prepayment meter customers.
Last year, government interventions and a £400 subsidy helped mitigate steeper bill increases. However, no similar measures have been announced this year, drawing criticism from Citizens Advice, with households owing suppliers a collective £2.6 billion in energy debts. Ofgem notes that a recent decrease in the average bill was partly due to a revised estimate of typical usage, impacting the perceived savings.
Households are encouraged by experts to review their energy deals, considering that fixed-rate options may provide more predictable costs, despite Ofgem's call for cautious market comparison.