Ofgem, the energy regulator, has announced an increase in the price cap for energy bills, taking the average annual cost to £1,738 as of 1 January 2025. The rise affects 26 million households in England, Wales, and Scotland and will see direct debit customers paying an additional £21 per year.
The average annual energy bill will rise to £1,738 as of 1 January as Ofgem increases the price cap. Someone paying by direct debit and using a typical amount of energy will pay £21 more a year from January. This means a household using the typical amount of energy will see an increase in bills of around £21 per year – at least until Ofgem next updates its price cap in April 2025.
The energy price cap covers 26 million households in England, Wales and Scotland and is set every three months by the energy regulator Ofgem. It fixes the maximum price that can be charged for each unit of energy on a standard – or default – tariff for a typical dual-fuel household which pays by direct debit. In April and July 2024, the cap fell but increased in October. Between 1 January and 31 March 2025, gas prices will be capped at 6.34p per kilowatt hour (kWh), and electricity at 24.86 per kWh. This means the annual bill for a dual-fuel direct debit household using a typical amount of energy will be £1,738 per year – an increase of £21 from the previous cap.Your energy bill depends on the overall amount of gas and electricity you use, and how you pay for it.A flat or a one-bedroom house with one or two people living in it has an energy bill of around £1,261 per year on average, according to Ofgem figures. A two or three-bedroom house with the same number living there has an energy bill of around £1,738 per year on average.The vast majority of people pay their bill by direct debit to help spread payments across the year. Those who pay every three months by cash or cheque are charged more – £1,851 from 1 January.Experts suggest that you submit a meter reading when the cap changes, so you won’t be charged for estimated usage at the wrong rate. This is especially important when prices go up.Fixed-price deals offer certainty for a set period, usually a year or sometimes longer, but if prices drop during the term, you could be stuck at a higher price
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