Ofgem has confirmed the energy price cap will increase by 5% from January 1, 2024.

The price cap will increase from the current £1,834 to £1,928 for a typical dual fuel household in England, Wales and Scotland the regulator has announced. This is just shy of the £2,074 average the price cap fell from in October.

The Ofgem price cap stood at £1,277 a year in October 2021 and £1,042 a year in October 2020.

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Ofgem said the increase of £94 over the course of a year - around £7.83 a month - was driven almost entirely by rising costs in the international wholesale energy market due to market instability and global events, particularly the conflict in Ukraine.

Chief executive Jonathan Brearley said: "This is a difficult time for many people and any increase in bills will be worrying. But this rise, around the levels we saw in August, is a result of the wholesale cost of gas and electricity rising, which needs to be reflected in the price that we all pay.

"It is important that customers are supported and we have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills.

"We are also seeing the return of choice to the market, which is a positive sign, and customers could benefit from shopping around with a range of tariffs now available offering the security of a fixed rate or a more flexible deal that tracks below the price cap.

"People should weigh up all the information, seek independent advice from trusted sources and consider what is most important for them, whether that's the lowest price or the security of a fixed deal."

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