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Why has the price cap gone up again?

In Britain, energy bills have risen by around 4% under the latest adjustment. The Ofgem price cap sets a ceiling on the unit rates households pay for gas and electricity across England, Scotland and Wales, covering about 20 million homes.

Market forecasts suggest the increase could reach 16% in January. Analysts say high wholesale prices paid by suppliers and the impact of conflict in the Middle East on energy markets are behind the expectation.

Charities are calling on the government for broader support, arguing that a VAT cut on electricity bills due to take effect on Thursday may not be enough on its own. Regulators are also urging households to take meter readings and keep a close eye on consumption before winter.

What could switching to a fixed tariff save consumers?

Ofgem recommends considering fixed-rate deals instead of variable tariffs, which can change every three months. Under this model, the unit price of gas and electricity stays the same, although the total bill still depends on how much energy is used.

Which costs should households watch when deciding?

The main challenge now is working out whether a fixed contract would really be worthwhile. If the expected sharp rise in January materialises, customers who lock in early could be protected by a lower unit rate; on the other hand, if international gas prices fall, long-term fixed deals could end up being expensive.

Which? and MoneySavingExpert advise households not to look only at their current supplier’s offer and to check exit fees carefully in any contract. If variable tariffs fall below a fixed price, customers who want to leave early can face high charges.

According to Ofgem data, around 5 million people pay their bill quarterly, after receiving a payment demand. By contrast, monthly direct debit, regular meter readings or a smart meter can provide a lower unit cost than standard credit, and is often required to access fixed offers as well.

  • Customers on prepayment meters now pay slightly less than they would on the capped direct debit variable tariff.
  • Tariffs offering cheaper electricity at night can help households save, especially drivers who charge an electric vehicle overnight.

What support is available for low-income households?

People receiving means-tested benefits will get a £150 discount on their electricity bills this winter. In most areas, the support will be applied automatically; in Scotland, consumers need to contact their energy supplier.

Some households may qualify for Cold Weather Payments, and most pensioners will receive Winter Fuel Payments. The government is said to have backed away, under political pressure, from a plan to limit the payment to only the lowest-income pensioners.

Supplier hardship funds, the Fuel Direct scheme that helps clear energy debt, insulation grants and some local support for solar panels and heat pumps are also available. Officials are warning people to be vigilant against scams presented as official aid.

Experts stress that indoor temperatures should not fall below the recommended 18C. Closing radiators in unused rooms, avoiding turning the boiler flow temperature up higher than necessary, taking shorter showers and washing clothes at 30C can all help keep costs down; MoneySavingExpert sums it up as “heat the person, not the home.”

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