Energy bills expected to rise by £85 a year

Energy bills are set to rise by £85 a year from April, according to Cornwall Insight, an energy consultancy.  

They predict that the energy regulator Ofgem will announce a 5% increase in the energy price cap, bringing the typical household bill to £1,823, up from £1,738. 

When will the new price cap be announced? 

Ofgem will announce the official new energy price cap level on 25 February. It will affect homes in England, Wales and Scotland.  

The price cap is set every three months and affects 26 million households on default, variable tariffs.  

What’s the energy price cap? 

The energy price cap sets the maximum price energy suppliers can charge for each unit of energy and for standing charges. 

But the cap doesn’t limit how much you actually pay. Your total bill depends on how much energy you use. If you use more, you pay more. If you cut back, your bill shrinks. 

Why are energy bills rising?  

Cornwall Insight explains that the price hike is due to a mix of colder weather and lower gas storage levels in Europe, which has pushed wholesale gas prices higher.  

The increase would mark the third rise in energy bills in a row, but it's still lower than the peak during the energy crisis in February 2022, when Russia invaded Ukraine. 

Pressure on low-income households  

Unfortunately, these rises are putting extra pressure on low-income and vulnerable households. 

Craig Lowrey, lead consultant at Cornwall Insight, said: “Households have been hit hard over the past few months and with bills set to rise for a third consecutive time, the pressure is not letting up.” 

Adam Scorer, chief executive of National Energy Action (NEA), a charity focused on helping people with energy costs, said:  

"There is no getting used to this new normal for the people we try to help. Millions of the most vulnerable households are struggling with debt and severely rationing their heating." 

Struggling with energy bills? 

If you're finding it hard to keep up with your energy bills, reach out to your supplier. 

Some suppliers provide grants if you’re really struggling, or you might be able to set up a payment plan for what you owe. 

If you’re vulnerable, check if you can join the priority services register so you can get additional support from your energy supplier. 

Read our guide on what to do about energy arrears.