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Energy price cap to rise to £1,928

Ofgem has announced that its energy price cap will increase to £1,928 from £1,834 for the period from 1 January to 31 March 2024.
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This means that customers on standard variable tariffs are going to be hit with more expensive energy bills at the time of year when energy use is usually at its highest.

While the price cap figure is illustrative of a typical use household paying by direct debit, customers should always be aware that it isn't a cap on bills. Using more than £1,928 worth of energy will you pay more, while using less will mean you pay less.

What can customers do now?

There are options on the table for customers. These include:

  • Checking to see if switching is an option. There are some fixed deals available but each household will have to decide whether any of them are the right deals to switch to. Those who want price certainty for a year or so may want to switch, but those who are happy to stay on a standard variable tariff should stay close to energy news and ensure that they're up to date with deals coming back to the market.

  • Tracking and managing energy use. Using a mobile app like Utrack will enable you to track where you're using energy around the home and where you could cut down to keep bills at a manageable level.

  • Seeing what support is available. There are discount schemes and other financial support available from the government, suppliers and local councils which you could be eligible for.

Richard Neudegg, director of regulation at Uswitch, said: “This rate increase will bite during the coldest period of the year when households need to use the most energy.

“The price cap will go up by 5% from January due to the increases in the wholesale energy market. 

“This means energy bills are likely to be the highest they’ve ever been for most homes this winter. Between January and March, average bills will be £46 more expensive than the same period last year when the government’s Energy Bill Support Scheme was in place.

“With bills so high, it’s important to ensure you are only using and paying for the gas and electricity you need. Tracking your usage can help uncover simple ways to save energy, such as lowering wash temperatures or changing your cooking methods. 

“If you’re struggling to make payments, don’t bury your head in the sand. Get in touch with your provider as soon as you can. They should be able to advise on payment plans, as well as any support schemes or grants you may be eligible for.

“Fixed tariffs are the only way to get any certainty about what you will pay for your energy. There are some deals worth considering, but generally open market offers are still limited. 

“The price cap is no longer fit for purpose and gives providers little incentive to offer better deals. The system needs reforming to create a more competitive market that also protects households."