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- Cornwall Insight says energy bills could fall from a peak of £1,717 during 2025
Experts predict that average energy bills could fall 1 percent in January 2025, but not before they rise 10 percent tomorrow.
The typical household currently pays energy bills of £1,568 a year, with prices capped by Ofgem’s price cap.
This will rise to £1,717 from October 1st, but could then fall to £1,697 when the price cap resets again on January 1st.
This is according to analysis by Cornwall Insight, which has accurately predicted price cap movements in recent years.
Warming up: Energy bills remain much higher than ‘norms’ seen before prices soared in 2021
The prediction of a drop in energy bills in January is a welcome change to Cornwall Insight’s previous belief that these prices would rise in the new year by a “modest” amount.
The company now believes that energy bills will decrease due to better gas storage across Europe and greater market confidence.
Craig Lowery, principal consultant at Cornwall Insight, said: ‘While households will have to endure an increase in the cap from October, our current forecasts suggest this is a temporary issue.
‘Is It is important that the government and other stakeholders consider what actions they can take to protect vulnerable consumers, whether through targeted direct support or changes to the billing system through additions such as social tariffs. Not everyone can wait for renewable energy savings to happen.’
Gas and electricity prices could continue to fall until at least September 2025, Cornwall Insight believes.
However, annual energy bills will still be hundreds of pounds more expensive than before the energy crisis began in late 2021.
Think about fixing
Experts say households can save money on energy by switching from a variable rate energy deal to a fixed rate one.
Uswitch energy expert Elise Melville said: ‘A slight drop in the peak price in January might seem like good news for households, but energy costs would still be 8 per cent higher than available fixed deals. at the moment.
“There are many fixed energy tariffs that are cheaper than the October price peak and more are coming to market as competition increases.”
What is Ofgem’s maximum price?
The price cap sets the energy bills paid by more than 80 per cent of UK households, although the exact amount you will pay varies depending on your gas and electricity usage.
The cap restricts how much gas and electricity companies can charge those on variable rates.
In practice, most companies with these rates charge the most they can, so the level of unit rates with capped prices and permanent charges is what consumers end up paying.
The headline price cap figure applies to households with variable tariff energy deals who pay by direct debit and use an average amount of energy.
However, the exact amount you pay will depend on your deal, your energy use, and where in the country you live.
The maximum price is reset four times a year.
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