Energy price rises are set to continue until April following a rise this January, signalling continued financial strain for UK households.
The latest hike under Ofgem’s price cap has raised the annual cost for a typical household to £1,738, £21 more than the previous cap.
Analysts and experts now predict a further 3% rise in April, bringing the annual cost to £1,785, on average an extra £4 per month.
In our guide we explain why these price rises are occurring, how much your bills could be set to increase and practical energy-saving tips to help those with costs.
What has caused the increase in energy prices?
The increase in the energy price cap reflects ongoing volatility in international energy markets, driven by geopolitical factors such as uncertainty over gas transit deals between Russia and Ukraine and EU gas storage levels, Ofgem claim.
Jonathan Brearley, CEO of Ofgem, said: “Ultimately the price rise we are announcing today is driven by our reliance on a volatile global gas market that is too easily influenced by unforeseen international events and the actions of aggressive states."
These pressures have pushed up wholesale energy costs, which directly impact consumer bills.
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Craig Lowrey, principal consultant at Cornwall Insight, warns: “Consumers must brace for continued fluctuations. These forecasts could very well increase or decrease several times before the April cap is set.”
The Ofgem price cap means the government subsides energy costs to combat the rise in energy prices(Image credit: Getty Images)
How much higher will energy bills be?
Live in Northern Ireland?
There are just two energy suppliers in Northern Ireland (SSE and Firmus Energy), which has its own regulatory system. The government says it will reveal details for Northern Ireland legislation on the energy price guarantee in due course.
Energy prices remain 50% higher than pre-COVID levels, despite being 10% lower than the same period last year.
Millions of households are also burdened with energy debt, totaling £3.8 billion, with average arrears exceeding £1,500 for electricity and £1,300 for gas.
Campaigners are urging for long-term measures, such as home insulation, to reduce bills. Caroline Simpson of Warm This Winter emphasises: “We need long-term solutions to support those in tough financial circumstances.”
With the energy price cap set at £1,738 until March 31st electricity will be capped at 24.86p per kWh and gas will be capped at 6.34p per kWh. This amount however does still vary depending on region.
Campaigners are calling for long-term solutions to help households deal with increasing bills(Image credit: Getty Images)
What government support is available?
A universal joint priority services register has been put forward by Ofgem aiming to simplify and streamline assistance for vulnerable households receiving specific means-tested benefits.
The joint priority services register is a free and voluntary system that your supplier uses to ensure the correct support is given to its most vulnerable customers.
Although, customers currently in need of help with heating oil costs must individually register with each utility company. The joint priority services register would combine the existing databases of energy firms and other utility services, including water suppliers, to make it easier for customers to find which provider offers them the right support.
The government also launched an energy MOT service to help households establish how to make energy-saving improvements to their homes.
How you can lower your energy bills
Improvement Grants
There are initiatives in place to provide homeowners with financial assistance in making energy efficiency improvements, including insulation grants
We've put together a comprehensive list of energy saving tips to help you navigate the energy crisis and lower your heating bills.
Included are some quick fixes you can do in the short-term, such as swapping to LED light bulbs, and higher-value improvements which come from making long-term investments in your energy efficiency, such as making sure your home has efficient insulation.
Energy companies also recommend submitting accurate meter readings to avoid overpaying based on estimates. Additionally, shopping around for fixed-price deals or reducing energy usage can help manage costs.
Will energy prices rise or fall in the future?
After initially falling before the January energy price cap announcement, energy prices are predicted to rise in the short-term.
The official announcement for the April price cap will come on February 25, it is widely predicted, such as by Cornwall Insights that the price cap in April will rise.
However, they do also anticipates prices will drop in July before rising again in October.
News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.
