Millions of individuals are set to face a rise in their energy bills this winter following Ofgem's announcement of its new price cap. The price cap will increase by 1.2% from January 1, meaning the average dual fuel household paying by direct debit will see their annual bill rise from £1,717 to £1,738 - an increase of £21.
This hike will take effect during the coldest months and comes at a time when millions of pensioners have lost their Winter Fuel Payment, worth up to £300. This is also the second increase in energy bills in recent months, after the price cap rose by 10% - or an average of £149 - in October. Ofgem revises its price cap every three months, so the new rates will remain until March 31, when they will be reviewed again.
The price cap for those paying by pre-payment meter is increasing from £1,669 a year to £1,690, while for those paying on receipt of bill, the figure is rising from £1,829 a year to £1,851. The price cap covers approximately 26 million households in England, Wales and Scotland. However, contrary to what its name implies, the price cap does not actually limit how much you can pay for energy.
If you use more energy, you'll pay more - or use less energy, and your bill will be lower, reports the Mirror . Tim Jarvis, director general of markets at Ofgem, commented on the current energy situation: "While today's change means the cap has remained relatively stable, we understand that the cost of energy remains a challenge for too many househol.