Energy bills are rising for millions of households in England, Scotland, and Wales as the new year begins, following a slight increase in the energy price cap by Ofgem. Prices for those on variable tariffs are rising by 0.2% from now, equivalent to a 3% annual increase for a household using a typical amount of gas and electricity, according to Ofgem.
The regulator's energy price cap sets the maximum price for each unit of gas and electricity for those on variable tariffs, not the total bill, meaning those who use more energy pay more. Ofgem illustrates the cap with a household using a "typical" amount of 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit. This household would see a 3 rise in its annual bill from 1,755 to 1,758.
Campaigners say billpayers are facing another winter of high energy prices, with the latest increase coinciding with the coldest period of the year. Kevin Peachey, cost of living correspondent, reported that the increase, albeit small, adds to the financial strain on households during the winter months.
However, changes announced in the Budget should mean a fall in the cost of energy from April. The specific details of these changes were not immediately available, but are expected to provide some relief to consumers in the coming months.
The amount of energy used varies significantly from household to household, meaning the impact of the price cap increase will differ. Factors such as the size of the home, the number of occupants, and energy efficiency measures all play a role in determining energy consumption.
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