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Your energy bill could jump £318 in January
Two suppliers now expect the January price cap to blow past £2,000, and the forecasts land in the coldest, most expensive month of the year.
In brief
Two suppliers now expect the January price cap to blow past £2,000, and the forecasts land in the coldest, most expensive month of the year. The October rise is the small one. January is where the real increase lands, so check a fixed deal now rather than after the cap is announced in late November. Originally…
A £318 winter shock
Ovo Energy forecasts the January 2027 price cap could reach £2,041 a year for a typical household. That is £318 more than the cap taking effect in October.
Where the cap sits today
A household with typical usage paying by direct debit is capped at £1,663 a year right now. Every forecast in this story is measured against that number.
October already stings
Ofgem confirmed in August that the cap rises 4 per cent on 1 October for standard variable tariffs. That is about £60 more a year, and the highest level in three years.
A third are shielded
More than a third of households are on fixed tariffs, so the October increase does not touch their unit rates at all. Everyone else absorbs it.
EOn's number is £2,027
The supplier expects the January cap, announced towards the end of November, to land more than £300 above today's level at £2,027 a year.
Nearly 18 per cent
EOn puts the jump from October's cap to January's at close to 18 per cent, taking a standard variable bill from £1,723 to £2,027 a year.
Ovo goes higher still
Ovo's own forecast sits slightly above EOn's at £2,041 for the year. Two suppliers, two methods, same direction of travel.
Nothing is official yet
No figure has been confirmed. Cornwall Insight, the consultancy whose forecasts usually set expectations, will not publish its next numbers until the end of this month.
Gas at a three-year high
Craig Lowrey of Cornwall Insight points at the Middle East as the driver. Renewed conflict has pushed wholesale gas to levels not seen in three years.
“Renewed tension in the Middle East has pushed gas prices to a three-year high.”
The clock is barely started
Ofgem sets the January cap from a three month observation window, and we are only weeks into it. What matters is not today's spike but how long it lasts.
“A short burst of high prices won't move the cap much on its own, but the longer prices stay raised, the more that movement becomes embedded.”
Europe's tanks are low
Even a retreat in wholesale prices may not rescue January. Gas storage across the continent is thin, which leaves little cushion when demand peaks.
“gas storage across Europe is running low, and that combination makes higher prices in January increasingly likely”
Roughly £25 a month
Joe Lytwyn of thimbl works an 18 per cent rise out to about £25 extra a month averaged over the year. The catch is that it arrives in January, when usage peaks.
“Averaged across a year, that is roughly another £25 a month”
The figure can still move
Wholesale markets shift fast, and the cap is not just a gas price. Ofgem folds in network costs, policy costs and supplier allowances before it publishes.
“Wholesale markets can move quickly, and the final figure will depend on market conditions and the other costs Ofgem includes when it sets the cap.”
The cap is not a ceiling
It limits what suppliers charge per unit of energy and through standing charges. Your actual bill still rises and falls with how much gas and electricity you burn.
22 million exposed
About 11 million households, roughly 35 per cent, sit on fixed tariffs. Around 22 million across England, Wales and Scotland are on tariffs the cap controls.
Fixing can beat it
Outfox has an 18 month dual fuel fix priced 0.8 per cent under the current cap. Sainsbury's Fix and Reward runs 24 months at £1,686, which is £37 below October's cap.
Read the small print
Before locking in, check exit fees, the supplier's reputation and contract length. A long fix that turns out badly priced is expensive to walk away from.
Oil and petrol climbing
Brent is trading around $108 after a 10 per cent weekly climb, petrol has hit a four year peak, and ONS figures show gas prices up 128 per cent in a year.
Strikes in the Gulf
The overnight surge followed new attacks on Saudi Arabian and Iranian ships, plus the shutdown of Saudi Arabia's East-West oil pipeline.
A promise going backwards
Ed Miliband pledged to cut bills by £300 this parliament. With borrowing costs at a 28 year peak, mortgage rates climbing and tax rises not ruled out, bills may end up close to £500 higher.
The key point
The October rise is the small one. January is where the real increase lands, so check a fixed deal now rather than after the cap is announced in late November.
