Energy bills forecast to jump 16% in January, says Cornwall Insight

Household energy bills could rise sharply in the new year. Energy consultancy Cornwall Insight forecasts that the price cap for January to March 2027 will reach £1,999.28 a year for a typical dual-fuel household paying by Direct Debit. That is a 16% rise, or £276 more than the £1,723 cap that started on 1 October.

If the forecast is right, it would be the biggest increase in the cap since January 2023. Cornwall Insight puts the electricity part of a typical bill at £959.44 and the gas part at £1,039.84.

Why prices may go up

The consultancy points to conflict in the Middle East disrupting gas supplies, and to European gas storage being at its lowest September level for 15 years, at around 65% full. Some of the higher wholesale prices are already locked into the period Ofgem uses to set the January cap.

It's a forecast, not a decision. Cornwall Insight says the size of any rise depends on how the conflict develops, and warns that higher prices could last beyond this winter if Europe has to refill depleted gas stores next summer.

What this means for you

Nothing changes yet. Ofgem announces the actual January cap in late November. If you're on a standard variable tariff, though, now is a good time to look at your options before any rise comes in.

Ways to prepare

• Compare fixed tariffs now. Ofgem said in August that some fixes were priced more than £100 below the October cap. A fix that's cheaper than the forecast January level could protect you, but check exit fees.
• Submit a meter reading. Send readings around the date prices change so you aren't billed at higher rates for energy you used earlier.
• Build up a small credit balance. Bills are highest in winter. Spreading costs across the year can stop a shock in January and February.

Sources: Cornwall Insight, Ofgem, Ofgem price cap explainer