Energy bills could jump 27% in January. Here’s what to do now

27%. That’s roughly how much energy bills are forecast to rise by on 1 January, right in the coldest, most expensive part of the year. We won’t know the exact figure until 25 November, but every forecast points the same way: up. Here’s what’s going on, who it affects, and what you can do in the next few weeks.

What’s happening

Most households in England, Wales and Scotland pay for gas and electricity on what’s called a standard variable tariff. The price you pay on these tariffs is limited by the energy price cap, which is set every three months by the energy regulator, Ofgem.

The cap doesn’t limit your total bill. It limits the price you pay for each unit of energy and the daily standing charge. Ofgem quotes it as what a typical household would pay over a year, to make it easier to compare.

Right now, that typical bill is £1,723 a year. Energy suppliers’ latest forecasts for January to March average around £2,180 to £2,220. That’s roughly £460 to £500 a year more for a typical household. The independent forecaster Cornwall Insight is lower, at £1,999.

The main reason is the cost of gas on the wholesale market, which has risen since the conflict in the Middle East began. Ofgem looks at wholesale prices between mid-August and mid-November to set the January cap, so the final figure could still move.

Who’s affected

If you’re on a standard variable tariff, your rates will change on 1 January. If you haven’t switched or fixed your energy deal in the last year or so, you’re very likely on one.

If you’re on a fixed tariff, your rates stay the same until your fix ends. Check when that is, because if it ends this winter you’ll move onto the variable tariff.

The price cap doesn’t apply in Northern Ireland, where prices are set differently.

What you can do now

• Find out which tariff you’re on. Check your latest bill or log into your supplier’s app. It will say whether you’re on a fixed or variable tariff.
• Look at fixed deals, but carefully. Fixing can protect you from the January rise, but fixed prices also move with the wholesale market, and they aren’t always cheaper. Compare the fixed price with the forecast cap, and check for exit fees.
• Take a meter reading on 31 December. Submitting a reading means you’re billed at the old, cheaper rate for the energy you’ve already used.
• Check what help you can get. The Budget included a £100 energy payment this winter for around 20 million households in council tax bands A to D in England. Also check whether you qualify for the Warm Home Discount.
• Struggling already? Talk to your supplier now. Suppliers have to offer support to customers in difficulty, such as payment plans. It’s far easier to sort out before you fall behind than after.
• Don’t cancel your direct debit. Paying by direct debit is usually the cheapest way to pay, and cancelling it can make your bills more expensive.

In my view, the best thing anyone can do this month is get a clear picture of what’s coming in and going out. A 27% rise on one bill is much easier to absorb when you know where you can make room.

My view

A £100 payment is welcome, but set against a rise of £460 or more, it covers barely a fifth of it. The households that will feel this most are those already stretched, who can least afford to shop around or pay upfront for a fixed deal. And January is exactly when bills from Christmas land too.

This article is for educational purposes only and is not financial advice. Energy price cap figures for January 2027 are forecasts until Ofgem confirms them on or before 25 November 2026. To see where your money goes each month, try our free financial dashboard.

Sources

• Energy price cap January 2027 predictions, Uswitch
• Energy price cap 2026 explained, Uswitch
• Energy price cap 2027 forecasts, EnergyPlus
• Will energy prices go down?, HomeOwners Alliance