Before you start the countdown to the new year, there’s one more job to be done in 2023: taking gas and electricity meter readings.
Every three months the energy regulator for Great Britain, Ofgem, sets a maximum price that suppliers can charge customers on standard variable tariffs.
On 1 January the new energy price cap, which governs what most of us will pay to light and heat our homes, comes into force – and it’s about 5% higher on average than current prices.
The increase will leave an average-consuming household paying £1,928 a year for gas and electricity, assuming they pay by monthly direct debit. Householders who pay on receipt of a bill will see prices rise to £2,058 a year for a typical home.
Remember, it’s the unit rates and standing charges that are capped, so the more energy you consume, the higher your bill. Where you live will also have an impact, as the cap on electricity prices differs slightly around the country.
Switched-on households without a smart meter will ideally take meter readings on 31 December or early on 1 January and feed them back to their supplier. Those with a smart meter can smugly spend the whole day in bed knowing that it will happen automatically.
The change to the cap will leave households paying the higher charges over January, February and March – often the coldest three months of the year. The expectation is that prices will fall again when the cap next changes on 1 April.
Last week, the independent research company Cornwall Insight said it expected the average annual electricity and gas bill to fall by about 14% – or by about £268 to £1,660 in April.
The company copies the methods used by Ofgem to calculate its predictions, and has proved highly accurate so far.
The fact that prices look poised to fall so significantly means that few people will want to sign up to one of the small number of fixed-rate deals that have appeared on the market, unless they love price certainty. Most will be better off staying on a capped tariff, for now at least.