The New Price Cap
Millions of households in the UK are bracing themselves for a £94 increase in energy bills starting January 1. The energy regulator, Ofgem, has confirmed the new price cap, which will see bills rise from the lowest figure since March 2022, £1,834, to £1,928 per year.
What It Means for the Average Household
The average household can expect their annual bill to increase by £151 due to the new price cap. However, it's important to note that the cap only applies to the amount paid per kilowatt hour (kWh) of gas and electricity, not the overall energy bill.
Government Support for Prepayment Meters
Around 4.3 million households with prepayment meters will continue to receive a government-backed discount to ensure they are not charged more than those who pay by direct debit.
Calculating Your Bill
To calculate your current energy bill, you will need to know the unit rate for gas and electricity and the standing charge for each fuel type. Multiply your energy usage in kWh by the unit rate and add the standing charge for each fuel type. Then divide the total by 12 to determine your expected monthly payment starting January 1.
Reasons Behind the Increase
The rise in energy bills is a result of the wholesale cost of gas and electricity increasing, according to Jonathan Brearley, chief executive of Ofgem. He emphasized the importance of supporting customers who may struggle with higher bills and expects energy suppliers to provide assistance to those in need.
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