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, which equates 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. It does not cap 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 have stated that 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 while the increase is small, it adds to the financial strain on households during the winter months.
However, changes announced in the Budget are expected to bring a fall in the cost of energy from April. The specifics of these changes were not detailed in the provided source material.
The amount of energy used by households varies significantly, meaning the impact of the price cap change will differ. Factors such as the size of the home, insulation, and heating habits all play a role in determining energy consumption.
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