Energy bills set to rise

Energy bills are set to rise by nearly 4% in January, with forecasts of a bigger jump in the future. This means households will need to take steps to reduce their expenditure.

Charities say the government should offer more support beyond a VAT cut on electricity bills and that households should reset for winter again.

The energy regulator Ofgem is advising people to consider fixing their energy deals so that the price per unit of gas or electricity does not change every three months, although the total bill will still vary depending on how much energy used.

Energy prices have risen by nearly 4% in recent years due to high wholesale prices paid by suppliers as a result of the conflict in the Middle East. Forecasters suggest a 16% increase is possible in January due to high international gas prices.

This includes reading the meter now, and taking other steps to keep a check on rising bills.

The trouble is that it is very difficult to work out whether a fixed deal is a good deal at the moment. Should energy prices rise sharply, then those who have fixed already have the certainty of what they will pay for each unit of energy. That price may well be lower than the forecast price in January.

However, if events in the Gulf region settle down, and a peace deal in the Iran war leads to lower international gas prices, then a longer-term fix might not seem such good value compared with the price cap.