Energy regulator Ofgem has announced that the energy price cap will increase by 5% on the previous quarter from 1st January to 31st March 2024.
The cost for an average household paying by direct debit for dual fuel equates to £1,928, a rise of £94 over the course of a year – around £7.83 a month. The price cap, updated every quarter, sets a maximum that can be charged to customers for energy bills.
Ofgem says that the price increase is driven almost entirely by rising costs in the international wholesale energy market due to market instability and global events, particularly the conflict in Ukraine.
The regulator says it will continue to use all levers available to ensure costs are spread fairly and customers struggling with bills are supported. I
Jonathan Brearley, CEO of Ofgem, said “This is a difficult time for many people, and any increase in bills will be worrying. But this rise – around the levels we saw in August – 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 and 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.”
Commenting on the increase David Cheadle, acting Chief Executive at the Money Advice Trust, the charity that runs National Debtline, said “The rise in the energy price cap will only add to the pressure on households already saddled with unaffordable energy debts – without help, many will be left out in the cold this winter as they struggle to heat their homes.”
“With household finances still under stress, more people will face impossible choices in the New Year as budgets no longer stretch to meet their essential costs. The absence in yesterday’s Autumn Statement of any further help with energy costs was disappointing. With one in four people with energy debts currently unable to pay, the need for a Help To Repay Scheme will only increase”