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, not the total bill. Therefore, those who use more energy will 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 expressed concern 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, noted that the increase, albeit small, 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, but they are anticipated 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 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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