The energy price cap forecast for October to December has been revised down by almost £40 per year, but households still face a 10% rise in their energy bills in Q4.
Cornwall Insight’s latest forecast for Q4’s price cap, which is based on the typical consumption levels of 2,700kWh of electricity and 11,500kWh for gas, has dropped from £1,761 to £1,723 per year for a typical dual customer.
Looking ahead to 2025, the company anticipates the January-March cap will stay at a similar level to October.
While any fall in the price cap is good news for energy customers, households could see their bills rise 10% from the £1,568 per year cap that takes effect from 1 July.
It said the increase in the wholesale market was the main reason for October’s predicted rise. Geopolitical concerns and supply-demand pressure were also having an impact on the cap.
The energy price cap sets a maximum price that energy suppliers can charge for each kilowatt-hour of energy and a daily limit on the standing charge applied, which covers the cost of supplying energy to your home.
It does not cap your bills. You could pay more depending on the amount of energy you use.
The cap will also vary depending upon where in the country you live, with Cornwall Insight figures representing the national average.
Lulled into a false sense of security
Ben Gallizzi, Uswitch energy expert, warned that the energy bills of millions of households were set to rise “significantly” this winter.
“The long-term outlook still remains very uncertain and it is expected that prices will remain at a similar, higher level in the first quarter of next year.
“Households should therefore avoid being lulled into a false sense of security from seeing their energy bills fall this summer, as the reprieve will be relatively short-lived.
“It’s important to prepare now for future price rises and consider locking in rates while there are competitive deals to choose from.”
Rising debt levels
Meanwhile energy arrears continue to rise.
Regulator Ofgem’s latest figures show energy debt levels have reached £3.1bn – up from 2.9bn in December 2023.
National Debtline is calling on the Government for urgent action to tackle energy debt, as energy arrears levels continue to break records.
Steve Vaid, chief executive of the Money Advice Trust – the charity that runs National Debtline – said: “Tackling energy arrears needs to be an urgent priority for the next Government.
“A Government-backed Help to Repay scheme, to provide repayment matching and write-off options for people with unmanageable energy debts, would help bring debt levels down.
“It’s positive to see some energy firms introducing repayment matching, but this must be made available to all who need it.”
