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Ofgem announces energy price cap will rise by 5% to £1,928 from January

It means the average household could be spending around £7.83 extra on bills a month.

Emily Sergeant - 23rd November 2023

Ofgem has today announced that the energy price cap will rise by 5% from January for the first quarter of 2024.

After the energy regulator brought the average annual household energy bill to below £2,000 for the first time since April 2022 with its last announcement back in August for the final quarter of 2023, Ofgem has just announced this morning that the energy price cap will unfortunately be rising once the new year rolls around.

The energy price cap is – which is updated every quarter throughout the year – sets a maximum that can be charged to customers for energy bills.

From 1 January 2024, the price cap will increase by 5% on the previous quarter to 31 March, which means that, for an average household paying by direct debit for dual fuel, this equates to £1,928 and a rise of £94 over the course of a year.

The 5% rise also means the average household could be spending around £7.83 extra on bills a month.

With the rising cost of living crisis sadly continuing the make its impact felt nationwide, the energy price cap increase is sure to mean thousands of Brits will be facing another difficult winter.

According to Ofgem, today’s price cap increase is driven almost-entirely by rising costs in the international wholesale energy market, and is due to “market instability” and “global events” – particularly the ongoing conflict in Ukraine. 

Ofgem’s announcement of the energy price cap rise comes only a few months after a shocking survey by Which? found that nearly nine in 10 (85%) British households admitted to trying to cut back on their energy usage due to rising bills putting significant financial, physical, and emotional strains on consumers.

The same survey also revealed that 13 million Brits didn’t put their heating on when it got cold last winter, as they claimed they were just “too scared” to do so.

Ofgem says its “priority” is to “protect consumers” and “ensure they pay a fair price for their energy” this winter.

“This is a difficult time for many people, and any increase in bills will be worrying,” Ofgem’s CEO Jonathan Brearley commented on the price cap announcement today, “But this rise is a result of the wholesale cost of gas and electricity rising, which needs to be reflected in the price that we all pay. 

“It is important that customers are supported and we have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills. 

“We are also seeing the return of choice to the market, which is a positive sign.

“Customers could benefit from shopping around with a range of tariffs now available offering the security of a fixed rate or a more flexible deal that tracks below the price cap.”

Mr Brearley added that people should “weigh up all the information” and “seek independent advice” from trusted sources, all while consider what’s “most important” for them – whether that’s the lowest price, or the security of a fixed deal.

Read more:

• New survey reveals almost half of all British households were ‘too scared to put the heating on’ last winter
• The cost of living crisis is apparently making people have fewer Sunday roasts
• ‘Freezing’ Bury woman died from hypothermia after refusing to turn heating on

The next quarterly energy price cap announcement covering April – June 2024 is expected to be made next February, Ofgem has confirmed.

Featured Image – Pxhere