UK energy bills to rise in January as Ofgem announces new price cap

Energy regulator Ofgem has today (November 22) announced a 1.2% increase of the energy price cap for the period covering January-March 2025. The change to the price cap – which sets a maximum rate per unit and standing charge that can be billed to customers for their energy use – will rise by £21 for an average household per year or around £1.75 a month.

For an average household paying by Direct Debit for dual fuel this equates to £1,738 per year. This is 10% (£190) cheaper compared to January-March 2024 (£1,928) and 57.2% (£2,321) less than the energy crisis (January-March 2023).

Ofgem says the cap increase comes as around 1.5million households switched tariff over the past three months. The regulator is urging customers to take advantage of the rising choice in the market and look for the best deal to help keep their household energy bills down.

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By switching, savings of up to £140 are currently available, Ofgem advises. Adding there are currently eight deals available that are at least 10% below the level set in the price cap. However, while these come with a lower standing charge, they do have a higher unit rate.

The energy regulator said this could benefit customers with lower energy usage but will not work for everyone so consumers should carefully consider what works for them.

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Tim Jarvis, director general of markets at Ofgem, said: "While today’s change means the cap has remained relatively stable, we understand that the cost of energy remains a challenge for too many households. However, with more tariffs coming into the market, there are ways for