Average household energy prices will rise by almost £100 to £1,928 in January in another blow for homeowners already struggling with the cost of living.
Energy regulator Ofgem announced on Thursday that its energy price cap will increase again in early 2024.
The price cap, which was introduced by the UK government in 2019 and is regularly reviewed by Ofgem, dictates the maximum price energy firms can charge for a standard tariff.
A spike in wholesale prices and greater demand over winter will see typical annual bills rise by 5% to £1,928 in January.
Most people have already seen a £100 increase from 1st October 2023 due to the removal of the government’s £400 fuel subsidy for last winter.
The subsidy was active from October 2022 to March 2023 and meant every household received a monetary sum towards their bills.
The reduction in energy prices recently only meant that the government was saving money on its support scheme.
It did not translate into savings for homeowners.
With inflation factored in and the absence of the winter credits, people will have to fork out more for their energy bills this winter.
Data shows that homeowners are spending roughly £1,000 more per annum compared to pre-pandemic levels.
Households face cost pressures over winter as energy prices jump
The hike couldn’t have come at a worse time for homeowners on the eve of the coldest and darkest days of the year.
Citizens Advice director, Gillian Cooper, believes the government should have offered more support.
Energy price initiatives were a glaring omission from the latest Autumn Statement.
Chancellor Jeremy Hunt acknowledged that “lots of households are struggling”.
However, there won’t be any targeted support this time round.
The arrival of spring will not provide any respite for homeowners due to an increase in standing charges, which are fixed daily costs that need to be paid just to receive gas and electricity.
Cornwall Insight’s Dr Craig Lowrey: “As we move through 2024, it’s not just the persistently high unit costs that will be a worry; the looming rise in electricity standing charges from April adds another layer to the equation.”