Average bills will have gone up by £170 over six months (Image: Getty)
has announced average annual energy bills will increase to £1,738 next year.
The typical household on a default tariff will pay £19 more a year, increasing from £1,717 to £1,738, which will come into effect from January 1, 2025.
Energy consultants Cornwall Insight previously predicted a 1% fall in tariff rates to £1,697, but Ofgem’s announcement is equivalent to a 1.2% rise, on top of a
Cornwall Insight said: “Given the price cap rise in October, many will have been hoping to see a fall in the cap for January. Unfortunately, forecasts show that prices will be staying relatively high for the remainder of winter.”
Between July 1 to September 30 2024, the cap was significantly lower at £1,568, meaning the typical household will experience an increase of £168 over six months.
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Energy bills already rose in October by 10% (Image: Getty)
While the cap is lower than the peak over the last two years, the market is still “very sensitive to global events” according to Cornwall Insight, which says it leaves prices “substantially above historic averages.”
This comes as a second blow to pensioners who lost the previously universal which is now allocated on a means tested basis for those on Pension Credit.
Energy regulator Ofgem updates the cap every three months, so anyone not on a fixed tariff will see their bills go up and down accordingly in England, Scotland and Wales.
The limit applies to what energy suppliers can charge per unit of energy, but it doesn’t cap the total bills, as these are based on actual usage.
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Households are being urged to consider fixing their tariffs for potential savings of “up to £120 per year against the current price cap.”
Director of regulation at Richard Neudegg said: “There are now a range of fixed deals available that are significantly cheaper than the predicted price cap for January, so it is well worth running a comparison to see how much you could save.”
Next year looks slightly more positive for the average household, as Cornwall Insight predicts a fall in costs: “Looking further ahead, we currently forecast the cap will drop slightly in April 2025 and again in October 2025.”
A household with a typical energy consumption is classed by Ofgem as a household which uses 2,700kWh for electricity and 11,500kWh for gas per year.