The average household energy bill is set to rise by 9 per cent in October when the latest change to the price cap takes effect, according to experts. Energy consultancy Cornwall Insight said it expects the typical household’s energy bill to rise to £1,714 a year, up from £1,568 currently, on October 1. This is less than its previous prediction in June, when it estimated that the cap would rise by 9.
9 per cent to £1,723. But the group said there is also likely to be a further “modest” increase in January 2025, with more rises possible early in the new year due to “recent tensions in the Russia-Ukraine war”. Energy regulator Ofgem will announce the new price cap for October to December on Friday August 23.
Ofgem changes the price cap every three months based on several factors, the most important of which is the price of energy on wholesale markets. The energy price cap was introduced by the UK Government in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use. The price cap does not limit a household’s total bills because people still pay for each unit of gas and electricity they use - the figures provided are calculated for an average-use household and if more energy than average is used, a household will pay above the cap.
Ofgem is currently considering the future of price protection, including the suitability of the price cap and a potential permanent ba.