A new forecast warns that energy bills for millions of households will rise again from the beginning of January.
Industry regulator Ofgem is expected to announce next Thursday that the energy price caps will be raised to 28.94p per unit of electricity and 7.42p per unit of gas from early next year.
According to experts at consultancy Cornwall Insight, this means the typical household’s bill will rise from £1,834 to £1,931 a year.
We have released our final price cap forecast for January-March 24, which estimates a 5% increase in bills.
We’re estimating a typical family would pay: £1,931 per year
Read more about our predictions below: https://t.co/n9KppW1wPf
– Cornwall Insight (@CornwallInsight) 16 November 2023
This is Cornwall’s final forecast of what the price range will be before Ofgem announces the levels next week.
Forecasts suggest the typical bill will fall to £1,853 by the start of April, but will not fall below today’s level until July next year.
Dr Craig Lowrey, lead consultant at Cornwall Insight, said: “An unstable wholesale energy market, coupled with the UK’s reliance on energy imports, makes it inevitable that energy bills will increase from current levels.
“This is leaving families facing another winter with bills hundreds of pounds higher than pre-pandemic levels, and affordable fixed deals in short supply.”
🗣️ Fixed charges cover costs such as maintaining the energy networks, wires and pipes that supply energy to our homes
We’re launching a call for input to start a discussion on whether changes are needed
Tap on the link for more details on counseling process pic.twitter.com/RxZPtJxMbQ
– ofgem (@ofgem) 16 November 2023
He added: “The King’s Speech acknowledged that it is our exposure to volatile international energy markets that has led to higher and lower-than-predicted bills.
“While we continue to advocate for urgent targeted support for vulnerable consumers, it is clear that the only sustainable solution is to shift the UK away from the impact of global energy prices towards sustainable, domestically-sourced energy.”
The consultants also warned that their forecasts showed the standing charge would rise to 8p per day from the start of April.
All households have to pay the permanent change, meaning any increase disproportionately affects those who use less energy.
Cornwall said the recent mild weather is helping keep gas prices down and if that continues, it could help lower bills next year.
But “sharp price declines are not expected”, it said.
Consumer magazine Which? Emily Seymour, energy editor at , said: “If you’re worried about struggling to pay high bills, don’t suffer in silence – help is available. Talk to your energy provider about a payment plan you can afford and check if you qualify for any government schemes.
“We would recommend that everyone without a smart meter should take a meter reading on or around December 31 to ensure they do not overpay for any energy they use before the new price cap comes into effect. It’s a good idea to submit meter readings on a regular basis, and this ensures you are billed correctly.
“Fixed deals are beginning to return to the market but we would not recommend locking in anything more than unit rates in your current deal or for more than a year. If you are offered a deal, it is really important to check the exit fees of the tariff in case you want to leave that deal early if the price limit is low.