Ofgem energy price cap will rise to £1,738 in January

Energy regulator Ofgem has announced that the price cap on gas and electricity costs will rise next year. The average annual energy bill in England, Scotland and Wales will rise to £1,738 per year from January, putting more pressure on household finances – at a time when cold weather drives up demand for energy.

That will push up the average annual cost of energy by £21, or by £1.75 per month. Tim Jarvis, director general of markets at Ofgem, says: “While today’s change means the cap has remained relatively stable, we understand that the cost of energy remains a challenge for too many households. However, with more tariffs coming into the market, there are ways for customers to bring their bill down so please shop around and look at all the options.

“Our reliance on volatile international markets - which are affected by factors such as events in Russia and the Middle East – means the cost of energy will continue to fluctuate. So it’s more important than ever to stay focused on building a renewable, home-grown energy system to bring costs down and give households stability.

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“In the short term though, anyone struggling with bills should speak to their supplier to make sure they’re getting the help they need and look around to make sure they’re on the best, most affordable deal for them.” The cap sets the maximum that suppliers can charge their 29 million household customers per unit of gas and electricity

Craig Lowrey, principal consultant at Cornwall Insight, said: “Supply concerns have kept the market as volatile as earlier in the year and additional charges have remained relatively stable, so prices have stayed flat.

“While we may have seen this coming, the news that prices will not drop from the rises in the autumn will still be disappointing to many as we move into the colder months.”