Millions of households across Great Britain are facing higher energy bills from January, following a surprise announcement from the industry regulator.
Ofgem's Price Cap Announcement
The energy regulator, Ofgem, confirmed on Friday that the quarterly price cap will see a slight increase. The average annual dual fuel energy bill will rise to £1,758 for the period covering January to March, up from £1,755 in the current quarter. This represents a 0.2% annual increase.
Ofgem stated that when adjusted for inflation, the cap is actually 2%, or £37, lower than the same period in 2025. Despite this technicality, the reality for consumers is an immediate increase in their outgoings.
The Deepening Crisis of Energy Debt
This winter's energy bills are expected to remain approximately 50% higher than they were before Russia's invasion of Ukraine, which triggered the initial surge in global energy market prices and the subsequent cost of living crisis.
The situation is compounded by a severe energy debt problem. Official figures reveal that UK energy debt has skyrocketed to £4.4 billion this year, a stark increase from £2 billion just three years ago. Alarmingly, this debt continues to grow even as wholesale prices have stabilised at higher-than-normal levels.
Data from Citizens Advice paints a grim picture, showing that nearly 7 million people are living in households in debt to their energy supplier. This equates to 10% of all households in Great Britain. The average energy debt for those seeking help from the charity was nearly £1,700 at the end of October—£700 higher than it was three years ago.
Campaigners Demand Government Action
Adam Scorer, the chief executive of National Energy Action, was highly critical of the situation. "A 1% drop in energy bills is cold comfort," he said. "They remain impossibly high for millions across the UK, just as they have been for the last four years. People are rationing their heating, they are cutting back on cooking, they are deep in debt, and they are suffering in cold, damp homes."
The fuel poverty charity is urgently calling on the Chancellor, Rachel Reeves, to use the upcoming budget statement to tackle the "crippling levels of household energy debt." Their proposed solution involves moving the cost of some environmental levies away from energy bills and instead recovering the costs through general taxation.
"With little prospect of bills falling significantly any time soon, the government will need to act," Scorer added. "This year the budget falls on Fuel Poverty Awareness Day. I hope the government is sufficiently aware to deliver the urgent and long-term action needed to deliver affordably warm homes."
