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- But there is still good news on the horizon, as bills could go down starting in the summer.
Household energy bills will double next year, according to experts at Cornwall Insight.
Energy regulator Ofgem’s average capped price bill, currently £1,717 a year, will rise to £1,738 from 1 January 2025.
But the average bill will rise to £1,782 from April 2025, or 2.5 per cent, according to its forecast.
Cornwall Insight has correctly predicted price cap movements since energy bills started rising in 2021.
This increase in the April energy bill would reflect turbulence in energy markets and the additional cost of regulatory change for gas and electricity in the UK, Cornwall said.
These reforms will see each energy bill rise by at least another £20 to fund subsidies for energy companies trying to meet the Government’s net zero targets.
Warming up: Energy bills to double, but there could be good news in 2025
However, there could be better news for energy bills starting in July.
A statement from Cornwall Insight said: ‘Looking ahead, current forecasts suggest a fall in energy prices in July.
‘However, we do not currently know the long-term impact of the recently announced nuclear power plant expansions – Torness in East Lothian and Heysham 2 in Lancashire until 2030, along with Hartlepool and Heysham 1 until 2027 – on wholesale prices and therefore therefore, on home prices. invoices.’
But experts said any increase in energy bills was bad news for households.
Simon Francis, convener of the Ending Energy Poverty Coalition, said: “The latest planned price cap increase will mean energy bills will be 70 per cent higher than they were in winter 2020/21. ; that’s over £750 extra a year for the average household.” It has to find a way to use energy levels similar to those of a few winters ago.
“This means more people are living in cold, damp homes, exposed to the health complications that arise from living in fuel poverty.”
Ben Gallizzi, energy expert at Uswitch.com, said: ‘This forecast rise would mark a third consecutive rise in energy prices, adding to the current suffering of households.
‘There are now a range of fixed deals available that are significantly cheaper than the peak price expected for January, so it’s worth doing a comparison to see how much you could save.
‘Right now, the average household could save up to £112 a year off the current maximum price by switching to a twelve-month fixed contract.
“Consumers who are worried about paying their energy bill should check what energy help they are eligible for and contact their supplier who will be able to offer help.”
What is Ofgem’s maximum price?
The price cap is a cap, set by Ofgem, that limits the maximum amount an energy company can charge for gas and electricity units used by consumers.
It also limits how much households pay in standing charges – daily rates paid regardless of how much energy is used.
The price cap was introduced in January 2019 to prevent energy companies from overcharging customers on variable rate tariffs.
Almost all homes now have rates regulated by Ofgem’s price cap.
How does the price cap affect my energy bills?
This depends on the type of tariff you have, your meter and how much energy you use.
From January 1, the average household on a variable rate tariff paying by direct debit will pay £1,738 a year for gas and electricity due to the price cap.
For those with prepaid meters, annual price-capped energy bills will rise by 1.2 per cent to £1,690 a year.
Meanwhile, those who pay when an invoice is sent will pay £1,851 a year, an increase of 1.2 per cent.
The typical home with an Economy 7 meter (electricity only) will pay £1,150 a year from January 2025, an increase of 1.7 per cent.
But exactly how much you’ll pay will vary depending on your energy usage. This is because the price cap only limits the maximum you can be charged for the units of gas or electricity you consume. The more units you use, the more you will pay and vice versa.