Households in Great Britain face surprise rise in energy bills from January

Energy bills will rise for millions of households in Great Britain from January, after the industry regulator announced a surprise increase in gas and electricity costs. The energy regulator, Ofgem, said on Friday that the quarterly price cap covering January to March will rise by 0.2% for the average annual dual fuel energy bill to £1,758, from £1,755 in the current quarter. Ofgem said, when adjusting for inflation, the cap is 2%, or £37, lower than the same period in 2025. Related: Use smart tech, turn heat down, service boilers: how to save money on energy bills The change in the cap – which dictates the maximum that suppliers can charge their 29 million household customers for each unit of gas and electricity – amounts to an increase of 28p a month for an average household. Tim Jarvis, the director general for markets at Ofgem, said: “While energy prices have fallen in real terms over the past two years, we know people may not be feeling it in their pockets. “The price cap helps protect households from overpaying for energy. But it’s only a safety net and there are practical ways that customers can pay less for their energy.” Bills for this winter are expected to remain about 50% higher than they were before the invasion of Ukraine triggered a rise in energy market prices that spurred the cost of living crisis. The unexpected increase comes after experts at Cornwall Insight had said they expected prices to fall by 1% because of lower wholesale energy prices. Ofgem said wholesale prices were currently stable and had fallen by 4% over the past three months, but that conditions remained “volatile”. It said that the cap had risen after a change in its calculations for an average bill based on customer usage, and “temporary” increases to costs linked to the warm home discount scheme. Official figures show that UK energy debt has climbed from £2bn three years ago to £4.4bn this year, a figure that has continued to rise over recent months even as wholesale market prices have stabilised at higher than normal levels. Figures from Citizens Advice show that nearly 7 million people are living in households in debt to their supplier – or 10% of all households in Great Britain. The average energy debt held by someone seeking support from the charity was nearly £1,700 at the end of October – which is £700 higher than it was three years ago, according to the charity. Adam Scorer, the chief executive of National Energy Action, said bills “remain impossibly high for millions across the UK, just as they have been for the last four years. People are rationing their heating, they are cutting back on cooking, they are deep in debt, and they are suffering in cold, damp homes.” The fuel poverty charity called on the chancellor, Rachel Reeves, to use the upcoming budget to help tackle the “crippling levels of household energy debt” by taking the cost of some environmental levies off the energy bills and recover the costs through general taxation. The minister for energy consumers, Martin McCluskey, said: “We know that energy bills remain too high. We are taking the long-term action needed to bring down bills for good with the government’s clean power mission.” Simon Francis, the coordinator of the End Fuel Poverty Coalition, said: “Energy bills remain stubbornly high as households face a fifth winter of the energy costs crisis. “We need long-term investment in energy efficiency, not short-term thinking. We need action to bring down electricity prices, not excuses. And we need a fair tax regime that puts people before profiteers.”