Households that pay energy bills by direct debit are being advised to submit meter readings before the end of March.
A new energy cap of £1,928 per year will apply from January 1, 2024, an increase of £94. The new rate will be in force until March, Ofgem said. It will take the average daily standing charge for electricity up to 53p per day and gas to 30p per day.
The cap is a limit on the amount that is charged per unit of energy. However, it is typically expressed in terms of average household bills for direct debit customers in a two- to three-person household. It is not a maximum household bill, meaning those using a large amount of energy are likely to pay more than the cap amount.
Ofgem CEO 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."
When should I take meter readings?
Submit electricity and gas readings to your provider before the changes take effect after March 31. The next quarterly rate will be announced in February.
An updated meter reading helps prevent your supplier from calculating bill prices that aren’t accurate to your usage.
Most providers will let you backdate meter readings for around a week, but it’s always worth double-checking.
Why should you submit meter readings?
Sending regular meter readings is crucial to avoid your provider overestimating energy usage and overcharging you.
Submitting your reading before the change will ensure you are paying for any energy already used, and keeps your bill as accurate as possible.
Otherwise, your next bill will be based on an energy company estimate of how much electricity and gas you used before the unit price changed.
How to take your meter reading and send it to your energy company
Locate your digital electricity meter and write down the five numbers in black and white, excluding the sixth number in red.
If you have a two-rate digital meter, write down all the numbers in black and white, from right to left, and ignore the red figures.
Send these figures to your energy company via their website, app, or over the phone.
If you’re not able to reach the energy company, take a visible photo of your meter reading and meter serial number and submit it as soon as you can.
How does the Energy Price Guarantee work?
The Energy Price Guarantee limits the amount you can be charged per unit of gas or electricity. It is not a cap.
Bills will continue to be influenced by how much energy you use — some people will pay more if they use more than the average amount, and some may pay less.
If you’re on a prepayment meter, the Energy Price Guarantee will be applied to the rate you pay for each unit of energy. This makes the money you put on the meter last longer than it otherwise would have.
What is the average UK monthly energy bill?
Gas and electricity usage depends on multiple factors including region, the size of your home, the energy efficiency of it or its appliances, and how many people live there.
British Gas has said that for those living in smaller one-bedroom households or flats housing one to two people (using 7,500 kWh of gas and 1,800 kWh of electricity), the monthly average can work out as £1,438.19; for those in roughly three-bedroom households with three people (using 11,500 kWh of gas and 2,700 kWh of electricity) it looks to be about £167.39; and for anyone in a five-bedroom household (using 17,000 kWh of gas and 4,100 kWh of electricity), they could pay £236.65.
This is set to come into force in January and is based on the price cap rates for a typical user paying by direct debit.
Ofgem said the rise in the price cap was due to an increase in the cost of wholesale gas in recent months. This is because of world events, including the Israel-Hamas conflict in the Middle East.
