The current price cap came into force on 1 October 2023 and sets average household bills at £1,834 based on new average consumption estimated).
From 1 January 2024 the average household bill will increase to £1,928 – a rise of 5% from current prices.
It affects around 29 million customers on standard variable tariffs (SVTs), including around 4 million customers on prepayment meters (PPMs). Further changes to the SVT are due to come into force on 1 April 2024 (announced February 2024) and 1 July 2024 (announced May 2024) and 1 October 2024 (announced August 2024).
The price cap limits the unit cost of energy and standing charges which firms can charge, not the total bill. If you use more energy than average you will pay more than this figure. Therefore it is useful to look at the cost of a unit of energy and the daily standing charge:
This enables us to make comparisons with previous years:
Overall, energy bills remain at a similar level to last winter, but people have less ability to pay these high prices as the cost of living crisis continues and energy debt reaches new highs.
Fixed term deals should be treated with suspicion as there are very few deals on offer. Customers should also exercise caution when opting for a deal with no or low standing charges as these may be passed on still via higher unit costs.
Britain’s broken energy system is set to cause another winter of misery, with fuel poverty affecting many of the most vulnerable. Last winter, over 9 million adults lived in cold damp homes and official figures showed that cases of hypothermia surged by 36% and around 5,000 excess winter deaths were caused by living in cold homes.
Other inequalities in the energy market remain with customers paying by standard credit (i.e. paying by cash, cheque or bank transfer) hit with a significant price premium.
Meanwhile some regions, such as Merseyside and North Wales will pay substantially more than others, such as those in the East Midlands.
To end the energy bills crisis, we need politicians to act and commit to supporting:
- More government help with energy bills to stop people being pushed into poverty this winter.
- Government investment in schemes to provide effective insulation and new efficient heating systems in homes to cut bills in the medium term.
- Rapidly expanding cheap, sustainable renewable energy to lower bills permanently.
- Saying “no” to new oil, gas and hydrogen for homes developments so we’re not locked into expensive fossil energy for longer than necessary.
Full Price Cap History (End Fuel Poverty Coalition records) are available to media on request.