Energy bills set to rise again for UK households from January amid ongoing market volatility
by Josie Clarke PA Consumer Affairs Correspondent · ChronicleLiveUK households are bracing for another surge in energy bills come January, as the regulator is anticipated to announce its second consecutive winter increase to the price cap.
Energy consultancy Cornwall Insight forecasts that Ofgem will disclose this Friday a 1% rise, or £19, bringing the typical household's energy bill from £1,717 to £1,736 starting January 1.
This adjustment comes as a disappointment after Cornwall Insight initially predicted a 1% decrease to £1,697, especially following a 10% upsurge in October.
The situation is further exacerbated for millions of pensioners who are set to endure the colder months with diminished support, as the new Government has axed winter fuel payments for those not on pension credit or other benefits, affecting about 10 million elderly individuals who will lose out on up to £300 this year.
Earlier in the week, Cornwall Insight commented, "Given the price cap rise in October, many will have been hoping to see a fall in the cap for January."
"Unfortunately, forecasts show that prices will be staying relatively high for the remainder of winter."
However, there is a glimmer of hope as prices are projected to dip slightly in both the second and fourth quarters of the forthcoming year. Ofgem revises the price cap for households every three months, primarily influenced by wholesale market energy costs, with the regulator set to confirm the level for the first quarter of the next year on November 22.
Introduced by the Government in January 2019, the energy price cap sets a maximum charge for energy suppliers in England, Scotland, and Wales per kilowatt hour (kWh) of energy used by consumers. It doesn't cap total bills, as households still pay for their actual energy consumption.
Although the cap is currently lower than during the peak of the energy crisis, which was exacerbated by Russia's invasion of Ukraine in February 2022, market prices remain "very sensitive to global events" and supply concerns linked to geopolitical tensions, according to Cornwall Insight.
Craig Lowrey, principal consultant at Cornwall Insight, remarked: "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."
He expressed disappointment that despite anticipation, prices will not decrease from the autumn rises as the colder months approach.
Lowrey urged the Government to step in to protect vulnerable individuals and address long-term energy supply issues. He stated: "With it being widely accepted that high prices are here to stay, we need to see action."
He suggested that measures such as social tariffs, adjustments to price caps, benefit restructuring, or other targeted support for vulnerable households should be seriously considered.
He added: "The Government needs to keep momentum on the transition while acknowledging that immediate support is essential for those struggling now.
"Inaction is a choice to leave people in the cold."
Charities are raising alarms over another potential hike in energy prices, with National Energy Action highlighting the severe consequences the current cold weather is already inflicting on those most vulnerable.
David Southgate, policy manager at disability equality charity Scope, commented: "This is a bitter pill to swallow for the many disabled people who face sky-high bills because they have no choice but to use more energy.
"Life costs a lot more when you’re disabled, because of needing to use more heating to stay warm and healthy, or charging vital equipment like wheelchairs and breathing machines.
"Our disability energy support services are hearing from disabled people who have cut back everything they can and racked up huge amounts of debt.
"The Government urgently needs to step in and bring in discounted energy bills for disabled people."
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