Households expected to see energy bills drop by £22 from January

Household energy bills are expected to drop slightly in January, according to new forecasts.

Experts at Cornwall Insight have said energy regulator Ofgem’s price cap is expected to dip by 1% when its next update takes effect.

It would result in a £22 decrease to an average bill of £1,733 a year for a typical household from January.

Nevertheless, analysts at the specialist consultancy said they expect the price cap to tick higher again from April.

Craig Lowrey, principal consultant at Cornwall Insight, said: “January’s price cap dip might look like good news but it’s only part of the picture.

“Bills are still well above pre-crisis levels and are set to climb again in April, and this time it’s not higher wholesale prices driving the rise.”

The predicted fall in the price cap in January has been linked to a slight drop in wholesale energy prices.

It would also come despite the expected introduction of the Nuclear Regulated Asset Base (RAB) levy to help fund the next generation of new nuclear power stations, which is expected to add around £10 a year to bills.

Cornwall Insight suggested April’s price cap is likely to rise by around £75 a year for an average household, based on its most recent estimates.

It said this would be “largely due to rising charges associated with the operation and maintenance of the country’s energy networks, specifically electricity transmission and gas distribution charges”.

Mr Lowrey added: “The shift to renewables will bring long-term stability and energy independence, but it’s not free.

“The upfront costs are real, and they’re landing on bills now.

“The challenge will be balancing short-term affordability with long-term resilience, and crucially making sure people understand why that trade-off matters.”