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New forecasts suggest that household energy bills in the UK will see a small reduction at the start of the year — followed by an increase again in April. The latest analysis from Cornwall Insight points to a January price cap of £1,733, a modest £22 annual decrease from the current level of £1,755.
While any reduction is welcome during a period of sustained financial pressure, analysts warn that the fall is very limited and unlikely to bring meaningful relief for most households. The shift in pricing pressures also signals a more complex outlook for the months ahead.
The January–March price cap, which Ofgem confirms every quarter, is shaped by the cost of gas and electricity on wholesale markets. Falling prices earlier this year helped to ease the cap slightly, but that trend is not expected to continue.
Cornwall Insight predicts that from April, the typical annual bill will increase by around £75, driven not by wholesale market volatility but by rising system and policy charges linked to the UK’s energy transition.
This marks a significant shift: instead of global price swings pushing bills upward, it is now the cost of upgrading Britain’s energy networks — essential for long-term stability — that is becoming a primary factor in customer bills.
According to energy specialists, the UK’s shift to low-carbon generation requires substantial investment. Modernising the grid, integrating renewables and reinforcing infrastructure all carry upfront costs.
These charges are now filtering through into consumer bills, even though the long-term goal is to reduce exposure to fossil fuel price shocks and bring more predictable pricing.
Dr Craig Lowrey of Cornwall Insight summarised the challenge clearly:
Balancing affordability today while investing in the system of tomorrow will be a central issue for both policymakers and suppliers.
The Department for Energy Security and Net Zero (DESNZ) has acknowledged that bills remain high.
Support measures — including the expanded Warm Home Discount, now reaching an additional 2.7 million people — are intended to help lower-income households during the winter months.
However, these support schemes do not address the structural costs being built into the system, and there is growing debate about how these charges should be recovered in future years.
It’s important for households to remember that the price cap limits unit rates — not total bills.
Customers who use more will still pay more, and those in older or less efficient homes may continue to feel significant pressure despite the small cap reduction.
Although the headline figures relate to domestic customers, small businesses often face similar pressures through their own energy contracts. As system costs rise, SMEs can expect these charges to appear within their standing charges and unit rates.
This makes regular contract reviews even more important — especially for businesses approaching renewal windows in early 2025.
A changing market brings uncertainty, but there are practical steps customers can take now:
Enerbiz provides this guidance with full transparency, helping households and SMEs navigate price cap changes and market volatility.
