Ofgem price cap rises to £4,279 today - what this means for your energy bill

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Households are covered by the Energy Price Guarantee (Image: Getty Images/iStockphoto)
Households are covered by the Energy Price Guarantee (Image: Getty Images/iStockphoto)

The energy price cap set by regulator Ofgem has today increased from £3,549 to £4,279 - but this won’t have too much of an impact on your bills.

Households are still covered by the Energy Price Guarantee - set at £2,500 a year for the typical home - so no one currently pays the full amount under the Ofgem price cap.

From today, the Government will increase the discount it applies to the price cap - up from 17p per kilowatt hour to 31.8p/kWh for electricity, and from 4.2p/kWh to 6.4p/kWh for gas.

However, you may still see slight changes to your energy bill from January 1 depending on where you live - although experts say any increases will be trivial.

This is because there are regional differences in the Ofgem price cap rates, but the discount applied through the Energy Price Guarantee is a flat rate.

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Ofgem price cap rises to £4,279 today - what this means for your energy billEnergy bills have sky-rocketed this last year (Getty Images/iStockphoto)

Your energy bill depends on how much gas and electricity you use, where you live, and your supplier.

Research from MoneySavingExpert shows there will be no, or little change, for most direct debit customers, even with the Ofgem price cap rising today.

This means the typical bill will stay at £2,500 for these customers.

But for prepayment customers, the average figure will increase from £2,559 to £2,579 a year.

If you pay on receipt of bill - which is the most expensive way to pay for energy - the typical bill will increase from £2,715 to £2,754.

MoneySavingExpert has a breakdown of how prices will change region by region. Billpayers in North Wales and Merseyside will be hit with the biggest increases.

The annual cost for direct debit households in this area will rise 0.5% to £2,579, then 1.3% to £2,655 for prepayment, and 1.9% to £2,838 for pay on receipt on bill.

But some places might see energy bills fall. Direct debit payers in North England are set to see their typical bill drop by 0.5% to £2,434.

Those on an Economy 7 tariff, where you pay two different rates for your electricity depending on the time of day, will be hit by the biggest changes.

MoneySavingExpert says it has heard from customers who have already been told their bills are changing by 11% on average.

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The £2,500 figure via the Energy Price Guarantee is just used to illustrate how much the typical household will pay - but what is actually capped, is the unit rates you pay.

Use more gas and electricity, and your bill will be higher, or use less and you’ll pay less.

The next big change to energy bills will come in April 2023 when the Energy Price Guarantee will rise to £3,000 a year for the typical household.

Levi Winchester

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