(qlmbusinessnews.com . Fri 21st Nov, 2025) London, UK —
How the January 2023 Ofgem Price Cap Adjustment Affects Your Energy Costs
Regulator Ofgem is poised to reveal the latest adjustment to the energy price cap this coming Friday, amid anticipation from millions of UK households for a marginal decrease in their bills during the winter peak.
Despite a minor expected decrease, gas and electricity expenses have remained considerably high. The recent plunge in temperatures has made the issue of energy costs even more pressing for many.
The impending adjustment to the price cap, which is to take effect from the beginning of January, will impact those on variable rate deals across England, Wales, and Scotland.
The specifics of the announcement are scheduled for release at 07:00 GMT, with industry analysts forecasting a modest reduction of about 1% in pricing.
It's crucial to understand that the price cap regulates the maximum per-unit cost that can be levied for gas and electricity, rather than capping the total bill. Consequently, higher energy consumption will naturally lead to higher bills.
Following a 2% hike from October to December, a household with average energy use is now facing an annual bill of £1,755.
The current Ofgem cap is based on the consumption figures for a “typical” household, which equates to 11,500 kWh of gas and 2,700 kWh of electricity annually, with payments consolidated into a single direct debit.
Since energy usage drastically varies between different households, a percentage-based calculation from one’s own yearly billing is advised for accurate assessment of the impending changes.
Cornwall Insight, a consultancy known for its precise market forecasts, has predicted a 1% decrease in the cap starting January, albeit with an expectation of rising prices come April. The consultancy notes a transition in the primary cost drivers for energy bills from soaring wholesale prices to the expenses involved in the upgrade and maintenance of the nation’s energy infrastructure.
Charitable organisations report a surge in people accruing significant debts on unpaid bills and supplier charges, with the total owed amount hitting a record £4.4 billion. In response, Ofgem is considering measures that could see up to £500 million of this debt eradicated, aiming for implementation at the beginning of next year.
Dhara Vyas, head of Energy UK which represents the energy suppliers, emphasises the importance of customers facing payment challenges to contact their providers promptly. She acknowledges the widespread difficulty in affording necessary energy usage but points out that suppliers can offer solutions such as more efficient appliances, tailored tariffs, or assistance in accessing suitable benefits.
Amid these discussions, the government has alluded to additional cost-of-living aid to be announced in the Budget on 26 November.
As colder weather prevails, advice on managing heating costs effectively – through methods such as wearing warmer clothes, insulating properties, and heating only occupied spaces – remains pertinent for those looking to mitigate the financial strain of staying warm this winter.
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