Energy price cap: Ofgem announces increase in price for start of 2024 with price cap rising by 5%

The Ofgem energy price cap will rise by five per cent from January 1, 2024, scrapping hopes for an easing of energy bills and the cost of living in the new year.

The regulator announced the new cap, which will increase the current level of £1,834 to £1,928 for a typical dual fuel household in England, Wales and Scotland from January 1 until March 31. This means that on average, households will pay £94 more per year on their energy bills. Ofgem said that the increase was motivated almost entirely by a rise in costs in the international wholesale energy market due to market instability and global events.

Ofgem chief executive Jonathan Brearley said: “This is a difficult time for many people and any increase in bills will be worrying. But this rise – around the levels we saw in August – is a result of the wholesale cost of gas and electricity rising, which needs to be reflected in the price that we all pay. It is important that customers are supported and we have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills."

He added: “We are also seeing the return of choice to the market, which is a positive sign, and customers could benefit from shopping around with a range of tariffs now available offering the security of a fixed rate or a more flexible deal that tracks below the price cap. People should weigh up all the information, seek independent advice from trusted sources and consider what is most important for them, whether that’s the lowest price or the security of a fixed deal.”