Energy prices set to rise again in January leaving people 'in the cold'

Hopes of a dip in energy bills in the New Year look set to be dashed. Latest predictions shows a 1% rise at the start of 2025.

Cornwall Insight said it expects Ofgem to reveal later week that the typical household’s energy bill will rise by £19 to £1,736 on January 1. The energy consultancy had previously predicted a 1% fall to £1,697

It will come as a blow to millions of households after prices rose by 10% in October. Millions of pensioners are also facing a winter with less support, after the new government decided to scrap winter fuel payments for those who do not receive pension credits or other benefits. About 10 million pensioners will miss out on the payments of up to £300 this year, the Press Association reports.

READ MORE: Heavy snow shut A55 and left A483 'impassable' as difficult conditions remain - live updates

READ MORE: A55 closed as first snow of winter leaves difficult driving conditions

Cornwall Insight said: “Given the price cap rise in October, many will have been hoping to see a fall in the cap for January. Unfortunately, forecasts show that prices will be staying relatively high for the remainder of winter.”

But prices are still expected to fall slightly in both the second and fourth quarters of next year, according to the consultants. Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets.

The regulator will confirm the level for the first quarter of next year on Friday, November 22. The price cap does not limit total bills, because householders still pay for the amount of energy they consume.

The cap is significantly lower than at the peak of the energy crisis, which was fuelled by Russia’s invasion of Ukraine in February 2022. But prices are still “very sensitive to global events” and supply concerns tied to geopolitical tensions, said Cornwall Insight. Join the North Wales Live WhatsApp community group where you can get the latest stories delivered straight to your phone

Craig Lowrey, the company's principal consultant, said: “Supply concerns have kept the market as volatile as earlier in the year and additional charges have remained relatively stable, so prices have stayed flat. While we may have seen this coming, the news that prices will not drop from the rises in the autumn will still be disappointing to many as we move into the colder months.”

He called for the Government to help protect the vulnerable and tackle energy supply for the long-term. Mr Lowry said: “With it being widely accepted that high prices are here to stay, we need to see action. Options like social tariffs, adjustments to price caps, benefit restructuring or other targeted support for vulnerable households must be seriously considered.

“The Government needs to keep momentum on the transition while acknowledging that immediate support is essential for those struggling now. Inaction is a choice to leave people in the cold.”

Ofgem is currently considering the future of price protection, including the suitability of the price cap. It’s also examining a potential permanent ban on so-called acquisition tariffs – cheaper prices for new customers to lure them away from their existing suppliers. Sign up for the North Wales Live newsletter sent twice daily to your inbox

Find out what's happening near you