What is the energy price cap?
The energy price cap sets the maximum price suppliers can charge per unit of energy on a standard tariff. It covers 29 million households.
After Russia's invasion of Ukraine in February 2022 energy prices soared, so in October ministers said household bills would be limited by a temporary government guarantee instead.
Under this, a typical household's annual gas and electricity bill stayed below £2,500 despite Ofgem's cap increasing above this level during the period.
The Energy Price Guarantee finished in June 2023, and the Ofgem cap once again became responsible for deciding how much customers can be charged.
From January, Ofgem says the typical annual household bill will go up to £1,928 from £1,834, a rise of £94 or 5%.
Standing charges - a fixed daily charge covering the costs of connecting to a supply - will remain unchanged at 53p a day for electricity and 30p a day for gas.
Pre-payment meters
The government has promised to bring prepayment energy charges in line with those for direct debit customers.
In January, households using prepayment meters will see their typical annual energy bill rise to £1,960, up from £1,949, and still £32 more than direct debit customers will pay.
Those who pay every three months by cash and cheque also pay more than those who use other methods of payment.
Their typical annual bill in January will be £2,058, £130 more a year than if they paid by direct debit.
Energy bills support
Some groups across the UK who may struggle to pay bills are receiving additional help through cost-of-living payments:
- £900 to households on means-tested benefits - paid in three instalments in spring and autumn 2023 and spring 2024
- £300 for pensioner households
- £150 to people on certain disability benefits
Vulnerable families can also claim help through the Household Support Fund, and - from October 2023 - the Warm Home Discount scheme.
Importantly, the £400 discount which all households in England, Wales and Scotland received last winter does not apply this year.
Go to our Energy Saving Advice page Financial Inclusion page for full details on support available or to speak to our Financial Inclusion team.
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