UK Energy Bills Edge Higher as New Year Begins Despite Ofgem Cap

Energy bills are rising slightly for millions of households across England, Scotland, and Wales at the start of the year.

The increase follows a modest adjustment to the energy price cap by regulator Ofgem.

Prices for households on variable tariffs are rising by 0.2 percent.

That equates to roughly £3 more per year for a typical household.

Campaigners say the timing adds pressure during the coldest months of winter.

How the Price Cap Works

Ofgem’s price cap limits the maximum unit price for gas and electricity.

It does not cap the total bill paid by households.

Those who use more energy will still pay more overall.

The regulator illustrates the cap using a “typical” household.

That assumes annual usage of 11,500 kWh of gas and 2,700 kWh of electricity.

For such a household, the annual bill rises from £1,755 to £1,758.

Actual impacts vary depending on individual energy use.

Households are advised to calculate the percentage change based on their own bills.

Standing Charges Drive the Increase

Standing charges are rising by 2 percent for electricity.

Gas standing charges are increasing by 3 percent.

These fixed costs cover network maintenance and government levies.

Electricity unit rates are also increasing slightly.

Gas unit rates are falling marginally, offsetting some of the impact.

Households that use more electricity are likely to see higher increases.

The price cap applies in England, Wales, and Scotland only.

Northern Ireland’s energy market is regulated separately.

Fixed Deals Offer Alternatives

Ofgem says many households could save money by switching to fixed tariffs.

Fixed deals lock in unit prices for a set period.

Anyone already on a fixed tariff will not see changes now.

Consumer group Which? says several deals remain below the price cap.

Emily Seymour from Which? offered guidance for households considering a switch.

“As a rule of thumb, we’d recommend looking for deals cheaper than the current price cap,” she said.

She added that deals should be no longer than 12 months and avoid high exit fees.

Winter Pressures and Support Schemes

Heating use typically increases in January and February. Snow and ice warnings are already in place for some areas.

Cold weather payments of £25 per week are available in certain regions.

These apply when temperatures are forecast to remain at or below zero for seven days.

Separate winter heating payments operate in Scotland.

The £150 Warm Home Discount has been extended to more low-income households.

Calls for Stronger Action

Campaigners say the small increase still adds strain for vulnerable households.

Simon Francis from the End Fuel Poverty Coalition said more help is needed.

“This is a case of every little hurts,” he said.

“We need much lower bills and measures to keep homes warmer every winter.”

Some pensioners have welcomed the reinstatement of winter fuel payments.

James Jones said the payment made a “big difference” during colder months.

However, he noted rising food and fuel costs continue to offset pension increases.

Relief Expected in Spring

There is potential relief on the horizon from April.

In the Budget, Chancellor Rachel Reeves announced the removal of some energy levies.

The changes are expected to lower bills by around £150 per year.

Some savings will be offset by costs linked to maintaining energy networks.

Wholesale energy prices have also shown signs of easing.

Analysts predict the price cap could fall by around 8 percent in April.

That would bring a typical annual bill closer to £1,620.

The post UK Energy Bills Edge Higher as New Year Begins Despite Ofgem Cap appeared first on Gooner Daily.