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Ofgem Price Cap Rises 0.2% on 1 January, With £136 Payment-Method Gap

Consumer groups urge immediate meter readings to avoid estimated billing that could lift costs.

Overview

  • The cap moves to an annual £1,758 for a typical dual‑fuel household paying by Direct Debit, £1,711 on prepayment, and £1,894 for pay‑on‑receipt customers, which is £136 above the cap level.
  • MoneySavingExpert warns households with high electricity use and little or no gas on standard tariffs could see bills rise by about 3% to 4% despite the small headline change.
  • Advice Direct Scotland asks households to submit readings before the New Year, check that smart meters are communicating, and keep a dated photo to head off disputes.
  • Uswitch says winter usage may push bills higher than the 0.2% rise implies and notes some fixed deals could save roughly £150 a year versus the capped standard tariff.
  • Analysts say the uplift stems from policy and network charges, not wholesale prices, with Ofgem’s next update due in February and forecasts pointing to a slight fall in April.