Customers of every major energy firm including British Gas, E.On, EDF, OVO and Octopus Energy will face higher charges from January 1.
That’s because energy regulator Ofgem has announced a 1.2% price rise taking effect on January 1 for all customers not currently on a fixed rate tariff.
It means that the average cost of electricity and gas will be £1,738 a year for a typical use household from 2025, a £21 increase.
It comes just three months after Ofgem rose prices in October by 10%, taking the total increases to 11.2% in just over three months.
Every energy customer with any firm will be forced to pay the new higher prices from January 1, unless you’re already on a fixed tariff deal or can switch to one before New Year’s Day.
There is more bad news later in the year, too, as bills are expected to rise yet again from April 2025.
As Money Saving Expert explained: “Energy regulator, Ofgem has announced that on 1 January 2025, the price cap will rise by 1% to £1,738 a year for a typical use household paying by Direct Debit.
“The price cap sets a limit on the maximum amount suppliers can charge for each unit of gas and electricity you use, and sets a maximum daily standing charge (what you pay to have your home connected to the grid).
“That means there’s no upper limit to what you actually pay – if you use more energy, you’ll pay more, use less and you’ll pay less.
“It only applies to providers’ standard and default tariffs, so if you’re on a fixed-term energy deal, the Cap doesn’t apply.
“If you’ve not switched in the last year or so, it’s likely you’re on a capped tariff.
“Bear in mind that each price cap only last three months, and the cap is predicted to rise again in April 2025.”
Energy giant British Gas is one of several suppliers urging customers to take action and fix before prices do go up.
It said: “If you’re on or choose a variable tariff, your energy prices will increase from 1st January 2025. We’ll be in touch to let you know your rates and your new estimated annual energy costs.”