Domestic energy prices are forecast to rise slightly in the New Year, with consultancy Cornwall Insight predicting that a typical household's annual bill will increase to £1,736 from January, up from the current £1,717. This represents a modest 1% rise but continues the trend of elevated energy costs compared to pre-pandemic levels. The energy price cap, set by regulator Ofgem, limits the maximum charge per unit of gas and electricity, affecting around 27 million households in England, Wales, and Scotland.
According to Cornwall Insight, energy prices are unlikely to return to pre-crisis levels due to persistent factors such as geopolitical tensions, extreme weather, and maintenance on Norwegian gas infrastructure. These conditions are expected to keep prices high, with experts warning that elevated costs could become the "new normal." Many households are already rationing energy use or accruing debt to stay warm, raising concerns about the affordability of energy for those on low incomes or with additional needs.
Looking further ahead, Cornwall Insight expects the energy price cap to decline slightly in 2025, with modest reductions in April and October. However, the consultancy has emphasised the need for government action to protect vulnerable households, such as introducing targeted social tariffs. Charities and advocacy groups are urging greater support to address the financial strain on millions of families.
Meanwhile, the government has faced criticism for ending universal winter fuel payments for pensioners, restricting them to those receiving pension credit or means-tested benefits. While the move was defended as a measure to tackle inherited budgetary challenges, critics warn it could leave many older or disabled individuals at risk of health issues due to inadequate heating. Legal challenges have already been launched in Scotland, highlighting the ongoing debate over the policy’s impact on vulnerable groups.