Energy regulator Ofgem has confirmed that energy bills for those on price-capped tariffs will rise by around 1.2% on 1 January.
That equates to an increase of about £21 a yearfor a home using a typical amount of energy compared with the current price cap. Daily standing charges are staying the same.
The price cap is not on your total bill, but on each unit (kWh) of gas and electricity that you use. Households that use more than the average amount of gas and electricity will see a bigger increasein their monthly bills than those that use less.
The current price cap sees a home using a typical, medium amount of gas and electricity pay around £1,717 a year, if they are on a variable tariff. The next one will see that figure rise to £1,738.
It’s important to note that the price cap isn't a limit on your total bill. How much energy you use will determine what you pay. So, customers with large properties should expect to pay more per year. The price cap also doesn't apply to you if you have signed up for a fixed deal.
Find out more:what is the energy price cap?
What will my energy cost in January 2025?
The new average rates for gas and electricity are:
- Electricity unit rate: 24.86p per kWh(currently an average 24.5p)
- Electricity daily standing charge: 60.97p per day(currently an average 60.99p)
- Gas unit rate: 6.34p per kWh(currently an average 6.24p)
- Gas daily standing charge: 31.65p per day(currently an average 31.66p)
If you have aprepayment meter,you pay the same standing charge as direct debit customers, but slightly lower rates per kilowatt hour.
At the new rates, a typical household can expect to pay around £145 per month for gas and electricity used between January and March. The same ‘typical’ household currently pays £143 per month.
Those estimates are based on using a 'medium' amount of energy. The energy regulator Ofgem (which sets the price cap) defines this as 11,500kWh of gas and 2,700kWh of electricity.
You'll pay a different amount if you use more or less than the ‘medium’. Below, we've compared the annual energy costs of example households using low, medium, and high amounts of energy paying current rates and the rates that begin on January 1, 2025.
| Fuel Type | Low user | Medium user | High user |
|---|---|---|---|
| Current electricity rate (24.5p per kWh) | £441 | £662 | £1,005 |
| New electricity rate (24.86p per kWh) | £447 | £671 | £1,019 |
| Current electricity standing charge (60.99p per day) | £222 | £222 | £222 |
| New electricity standing charge (60.97p per day) | £222 | £222 | £222 |
| Current gas rate (6.24p per kWh) | £468 | £718 | £1,061 |
| New gas rate (6.34p per kWh) | £476 | £729 | £1,078 |
| Current gas standing charge (31.66p per day) | £116 | £116 | £116 |
Based on Ofgem's typical domestic consumption values for a low user (7,500kWh gas and 1,800kWh electricity), medium user (11,500kWh gas and 2,700kWh electricity) and high user (17,000kWh gas and 4,100kWh electricity).
The actual prices you pay for your energy will vary by region and by how you pay. Different suppliers may split out their unit rates and standing charges differently.
Your energy supplier should contact you to let you know your new prices before it starts charging them.
The price cap doesn't apply if you live in Northern Ireland.
If you have a prepayment meter, your unit rates will be slightly lower than those who pay by direct debit, though your standing charges will be the same.
Why is the energy price cap going up?
While the worst of the energy crisis is behind us, the energy wholesale market is still volatile and can be affected by numerous external factors, resulting in price rises. Geopolitical tensions, repairs to energy infrastructure, and even the weather can affect the price of energy. The UK is particularly vulnerable to these factors because it relies heavily on imported energy.
Should I fix my energy prices?
After a long drought of options, it is now possible to switch to a fixed energy tariff. With variable rates remaining high this winter, it could be a good time to fix a deal if you can find one with cheaper rates than your providers variable tariff (which may also be called flexible tariff).
We've seen several tariffs this month that would see you paying less for your energy than the price capped rates from January. By shopping around the energy market, you could save as much as 5% as compared to January's rates.
Bear in mind that should energy prices drop in the spring, and you find yourself wanting to leave a fixed tariff early, some fixed deals will charge you to leave, whereas others come with hefty exit fees.
Before you switch, compare your monthly payments on a fixed deal with those you'd expect to be on the price-capped tariff, and make sure you're not agreeing to exit fees that would stop you being able to leave should things change.
Compare gas and electricity prices today: use our free, independent energy comparison service to find the best provider for you
What if you can't afford your energy bills?
If you're already struggling to afford your energy bills, there are several resources available to help you.
Reaching out to your supplier is the best way to get set up with some help. Most of the major energy providers have signed the EnergyUK Winter 2024 Commitment, which provides additional support for vulnerable customers through a series of financial measures and outreach programmes.
In addition to support from suppliers, there are government schemes designed to help those in need.
If you're not sure what you might be eligible for, head to our guide togetting help if you're struggling to pay your energy bill.
