The UK Government’s gas and electricity regulator, Ofgem announced on the 23rd of November (2023) that energy bills are set to rise as the energy price cap for gas and electricity is set to increase by 5%.

Price cap
Sets for each quarter the maximum charge that a customer
can pay up to on their energy bills.

This rise will occur during the first quarter of 2024, from the 1st of January to the 31st of March 2024. Households that pay for dual fuel on a direct debit, will see prices on their energy bills hit around £1,928 from £1,834. This is a rise of £94, or £7.38 a month. This will put added pressure on many households in the UK as we move into the colder months.

For those paying by direct debit, they will see standing charges and unit rates rise on their energy bills due to the price cap. The rises are as follows:


Gas

1st of October to the 31st of December 2023:
Standing charge: 29.6p per day
Unit rate: 6.89p per kilowatt hour (kWh)

1st of January to the 31st of March 2024:
Standing charge: 29.6p per day
Unit rate: 7.42p per kilowatt hour (kWh)


Electricity

1st of October to the 31st of December 2023:
Standing charge: 53.4p per day
Unit rate: 27.35p per kilowatt hour (kWh)

1st of January to the 31st of March 2024:
Standing charge: 53.4p per day
Unit rate: 28.62p per kilowatt hour (kWh)

Be aware that these rates are averages, and they can vary throughout the UK.

Money Saving Expert, Martin Lewis, has stated that:

“…unless you really want price certainty…
Then you might as well stick on the price cap right now.
If those predictions are correct”

He also states:

“…expect your direct debits to go up. If and when that does happen,
make sure you go online… You can see if your direct debit is fair.
They do not always get it right. Make sure you’re doing regular
meter readings, unless you’ve got a working smart meter.”

This price cap is set to affect the energy bills of 29 million households throughout the UK, including in England, Scotland, and Wales. With those on a prepayment meter being affected the most. Those that pay quarterly, either with cash or cheque, will find that they are paying more than those that choose other payment methods.

Last year’s prices were lower due to the support received from the UK Government under their Energy Price Guarantee, this has not been renewed for this year’s winter months, meaning households are set to be hit by the rise in their energy bills.

After the government’s Autumn Statement, Citizen’s Advice’s Head of Energy Policy, Gillian Cooper claimed that:

“The government missed the opportunity to announce extra support for households who desperately need it this winter.”

The reason for this rise in energy bills has come from several factors including market instability worldwide and global events, including the conflict in Ukraine.

Ofgem promises to make protecting consumers their priority, and CEO of Ofgem, Jonathan Brearley has stated that:

Energy bills to rise

“This is a difficult time for many people, and any increase in bills will be worrying.
But this rise – around the levels we saw in August – is a result of the wholesale
cost of gas and electricity rising, which needs to be reflected in the price that
we all pay.

It is important that customers are supported and we have made clear to suppliers
that we expect them to identify and offer help to those who are
struggling with bills.

We are also seeing the return of choice to the market, which is a positive
sign and customers could benefit from shopping around with a range of
tariffs now available offering the security of a fixed rate or a more flexible deal
that tracks below the price cap. 

People should weigh up all the information, seek independent advice from
trusted sources and consider what is most important for them whether that’s
the lowest price or the security of a fixed deal.”

Analysts have predicted, however, that as we move into the second quarter of 2024, these prices on our energy bills will begin to lower again.