Energy price cap rises to £1,928

The energy price cap will rise from £1,834 a year to £1,928 when it changes in January, meaning households will face eye-watering bills for another winter.

The price cap, which was introduced by the energy regulator Ofgem in 2018, limits what a supplier can charge on their standard variable, or default, tariff. The cap is based on the price per kWh of electricity and gas that can be charged. It isn’t, however, a limit on total bills, as these depend on usage, so those who live in large properties or who consume a large amount of energy could well see annual bills much higher than £1,928.

Consumers are being urged to take gas and electricity meter readings by September 30 at the latest to help reduce the chances of them being overcharged. Providing an accurate reading means that your energy supplier is less likely to base your bills on estimated readings, which may not reflect the amount of energy you’re using. If you’re worried about ever-increasing energy prices, read our article The energy bills crisis: what can you do about soaring costs?

The October price cap was the lowest the energy price cap had been since March 2022. The rise in the energy price cap comes before an expected fall in March, meaning that most households will still face particularly high bills this winter. Household energy bills remain around double what they were before Russia’s invasion of Ukraine, and the £400 energy rebate the government gave last winter won’t be received this winter. This is expected to place further pressure on households who are already struggling to make ends meet.

Dr Craig Lowrey, principal consultant at energy analysts Cornwall Insight, said: “Amid the cost-of-living crisis, the last thing households need is a rise in energy bills – especially going into the winter months.

“However, as is often the case in the energy market, new challenges have arisen, and our reliance on foreign energy has once again left the UK vulnerable to price increases caused by events around the globe.”

Until July, typical energy bills were capped at £2,500 a year under the government’s Energy Price Guarantee, but this was a temporary measure.

The energy price cap is back in force, and will now change every three months. It’s predicted that energy prices may fall later in 2024, but this depends on the wider economic and geo-poliical landscape. The energy market is hugely volatile, and these forecasts are changing regularly. You can find out more about the price cap in our guide What is the energy price cap?.

The latest energy price cap announcement comes as many households are struggling to make ends meet as prices rise across the board. Despite inflation falling to 4.6% in October, following a reduction in the energy price cap, prices are still rising and it remains more than double the government’s 2% target.

Jonathan Brearley, chief executive of Ofgem, said: “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.”

The cap affects around 22m UK households, who are already seeing their energy bills at their highest level since the cap was introduced.

Default tariffs are usually suppliers’ most expensive tariffs and in the past many energy customers have been able to save hundreds of pounds by switching to a cheaper fixed rate deal. However, soaring global energy costs have meant that for several months, suppliers have been unable to offer deals lower than the price cap.

Many suppliers ceased trading altogether last year due to rising wholesale costs and the cap limiting the amount they can charge customers. If your supplier has stopped trading, find out what happens next in our guide What happens if my energy supplier stops trading?

At present, any fixed rate tariffs that are available are typically only on offer to existing customers. If you are considering moving to a new energy deal, check carefully for any exit penalties first. Find out more in our article Should I fix my energy bills?