The start of the new year brings bad news for UK households, as they will have to pay more for their energy bills due to Ofgem’s latest price cap.
The cap, which limits how much suppliers can charge customers for gas and electricity, has risen to £1,928 from £1,834 in October. This is the first increase since January last year, and it affects dual-energy customers who pay by direct debit.
The £1,928 cap is an annual average of what customers would pay on standard variable or default tariffs. Until March, customers will pay 7.42p for gas and 28.62p for electricity per unit, up from 6.89p and 27.35p respectively. The daily standing charges of 53p for electricity and 30p for gas remain the same.
Alastair Douglas, the chief executive of comparison site TotallyMoney, said that customers will face higher costs to heat and light their homes. He also noted that the current cap is much higher than the £1,137 cap that was set in January 2019, before the pandemic and the Ukraine war.
Douglas warned that energy debt has reached record levels, as two years of high inflation have strained people’s budgets. He advised customers not to wait for energy companies to contact them and offer support, as instructed by the government regulator, but to take action and switch to cheaper deals.
UK’s cost of living crisis will cut Households’ income by over £2,000