UK Energy Bills to Increase by nearly £150 in October 2024

UK households will face higher energy bills after the regulator raised the price cap by 10%.

Ofgem said the average home energy bill will increase by £1,568 to £1,717 on October 1, 2024, meaning the average annual bill will rise by £149.

The regulator sets the price limit for each unit of energy used based on several factors including wholesale energy prices.

The limit changes every three months – January, April, July and October.

Energy prices have fallen twice in 2024 but are set to move back up.

Households on standard variable tariffs paying by direct debit will pay on average 24.5p per kWh for electricity and a daily standing charge of 60.99p and 6.24p for gas with a standing charge of 31.66p.

Nevertheless, average bills remain six per cent lower than in 2023.

Urging consumers to “shop around” and consider opting for a fixed-rate tariff, Ofgem chief executive Jonathan Brearley said:

“We know that this rise in the price cap is going to be extremely difficult for many households.

“Anyone who is struggling to pay their bill should make sure they have access to all the benefits they are entitled to, particularly pension credit, and contact their energy company for further help and support.

“We are working with government, suppliers, charities and consumer groups to do everything we can to support customers, including longer-term standing charge reform, and steps to tackle debt and affordability.”

Cornwall Insight said there is likely to be another “modest” increase in January 2025.

Labour scrapped the winter fuel payment for those who are not in receipt of pension credits or other means-tested benefits, in the first change to the benefit since it was introduced in 1997 for all pensioners.

The Treasury said the changes would see the number of pensioners receiving payments of up to £300 fall from 11.4 million to 1.5 million.

The government has since urged pensioners to check that they are claiming Pension Credit, with an estimated 800,000 pensioners not claiming the means-tested benefit despite being eligible.

Pension Credit tops up the weekly income of all people aged 66 and over to £218.15, or £332.95 if in a couple.

A Labour spokesperson said: “This price increase is the harvest of 14 years of Tory neglect and failure to prepare and invest in British-owned clean energy.

“The Labour government has hit the ground running to tackle the root causes of high energy prices.”

“In under fifty days, we have set up Great British Energy to cut bills for good, lifted the onshore wind ban, consented unprecedented amounts of solar power and have set the largest ever budget for our renewables auction.

“Labour’s bold energy plans will warm homes across the country, cut energy bills for good and create thousands of high-skilled, well-paid jobs as we move towards cheaper, homegrown clean power.”

Mr Brearley warned that energy price rises are driven by international gas price rises and that the UK will “be in this world until we build out of it”.

He added: “Until we build different infrastructure that gets us a different energy system, what we all need to do is to make the best of the circumstances we’re in and look after the most vulnerable customers.”

Campaign group Warm This Winter accused energy companies of “profiteering”, with 20 firms making more than £470bn in profits since 2020.

A spokesperson said: “That shows there is money in the system but that is going to energy bosses and their shareholders when it needs to go to ordinary people.”

The End Fuel Poverty Coalition said: “Ending energy debt, extending the Household Support Fund, expanding Warm Home Discounts and evolving standing charges would all help mitigate the impact of high bills and the axe to the Winter Fuel Payment.

“But as well as support this winter, the public need to see a clear timetable for when the very real benefits of cheaper renewable energy and the Warm Homes Plan will kick in.

“To add insult to injury, in the detail of today’s Ofgem announcement is the fact that the profit margins energy suppliers are allowed to make will increase by 11 per cent.

“Add to this that every month we hear about more massive profits for firms in the wider energy industry.

“It’s time to tax these firms fairly – not just the fossil fuel producers – and use the money to keep people warm now and in the long term.”