Martin Lewis has warned households struggling with energy bills that costs are likely to get worse before they get better, as millions of people face the 'awful' prospect of a sharp rise in January.
On his X account, the Money Saving Expert founder said: "The latest predictions for the January Price Cap - AWFUL, up 28.8%! This is our internal MSE document where we average three forecasts and how its changed over the past few weeks as wholesale rates have continued to rocket."
It comes as energy analysts predict the Ofgem price cap could jump by 16 per cent at the start of 2027, adding hundreds of pounds to the annual bill of a typical household.
Experts at Cornwall Insight forecast that the cap will rise by £276, taking it from £1,723 to £1,999 a year for a typical dual-fuel household from January 2027.
The prospect of another increase will be particularly worrying for families heading into one of the coldest and most expensive periods of the year, when heating demand typically rises and daylight hours are shorter.
There are also fears the increase could be even bigger if the conflict involving the US, Iran and Israel continues to disrupt energy markets and push up wholesale gas prices.
The latest predictions for the January Price Cap - AWFUL, up 28.8%! This is our internal MSE document where we average three forecasts and how its changed over the past few weeks as wholesale rates have continued to rocket. PS Jan prediction is getting much more locked in as we're 85% through the 19 August to 17 November 2026 assessment period. April & July predictions are much more crystal ballgazing.
— Martin Lewis (@MartinSLewis) November 3, 2026
Martin Lewis explains when gas standing charges will end
There has been some positive news for households, with Prime Minister Andy Burnham announcing a series of measures intended to ease pressure on energy bills.
These include removing VAT from domestic energy bills, which is expected to save the average household around £45 to £50, and a £100 winter energy payment for around 20 million households living in Council Tax bands A to D.
The Government has also confirmed plans to scrap gas standing charges, which are fixed daily fees households pay regardless of how much gas they use.
Best to keep the heating on low all day? Does foil behind radiators work? Is now the time to fix? Got questions on energy bills, energy efficiency, solar panels & more, that's next week's @ITVMlshow. I'll be joined by specialist heat engineers so pls post questions by reply.
— Martin Lewis (@MartinSLewis) November 6, 2026
However, Martin Lewis warned that consumers could have to wait until late 2027 or even January 2028 before the change takes effect.
Chancellor John Healey said the Government would ask Ofgem to deliver the removal of the charges in 2027, or as soon as possible afterwards.
Speaking about the timetable, Mr Lewis said: "The gas standing charge, on the price cap anyway, is to be scrapped in 2027. What does 2027 mean? Well, as it's part of the price cap, it definitely won't be before the 1st of October."
The typical gas standing charge is currently around £108 a year for households paying by direct debit or prepayment meter.
Under the planned changes, this fixed cost will be moved into the unit rate – the amount customers pay for each kilowatt-hour of gas they use.
That means the reform will not automatically cut everyone's bill. Instead, households that use less gas should benefit, while those who use more could pay more.
Mr Lewis said: "This isn't about saving money in totality. This is about a structural change and I've always argued that – for fairness – so that those low users who struggle at the moment to cut their bills because so much of it is about the standing charge, and I get so many messages about this, that won't happen anymore."
He estimated that the change could add roughly 0.8p to 0.9p per kilowatt-hour to the gas unit rate, although he stressed this was only a rough calculation and the final figure would depend on energy prices at the time.
He added: "What does it mean? Lower users will pay less, higher users will pay more. And actually, because there are quite a lot a low number of very high users and it's done on the mean average, it actually works out 60 per cent of people will pay less, 40 per cent of people will pay more."
The Government estimates that around 60 per cent of account-holding households could save an average of £45 a year as a result of the change.
In a statement, the Government said: "Tens of millions of households will no longer pay standing charges on their gas bills as the Government gives families more control over what they pay and some more breathing space.
"A standing charge is a fixed daily fee added on top of a household gas bill, regardless of how much gas has been used. A household could use no gas at all but still must pay the standing charge.
"The Chancellor will announce an end to this unfair and outdated practice. He will ask Ofgem to deliver removal of these charges – which are £108 a year for the typical household on average – in 2027 or as soon as possible after.
"Instead, these fixed costs will be paid on the unit rate, which could save 60% of account-holding households around an average of £45 off their annual bill."
Energy price cap forecast to hit £1,999 in January
The Ofgem price cap currently stands at £1,723 a year for a typical dual-fuel household paying by direct debit.
This is a 3.6 per cent increase on the previous three-month period.
The price cap sets the maximum rates suppliers can charge customers on standard variable tariffs for each unit of gas and electricity, as well as the daily standing charges. It is not a limit on the total amount a household can pay, meaning bills will be higher for those who use more energy.
Cornwall Insight expects the cap to rise by 16 per cent in January 2027, reaching £1,999 a year – an increase of £276.
The consultancy said: "The price cap is expected to rise by 16% compared to October, reaching £1,999 a year for a typical dual-fuel household in January 2027, an increase of £276 and the largest rise since January 2023."
It said the increase was largely being driven by escalating conflict in the Middle East, which continues to disrupt gas supplies in the UK and around the world.
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The consultancy added that EU gas storage stocks had fallen to their lowest September levels in 15 years, adding to pressure on the market.
It also warned that some of the price increases had already been reflected in the calculation for January's cap.
Cornwall Insight said: "Ofgem sets the wholesale part of the cap using prices from a fixed period known as the observation window. With that window for the January cap now nearly halfway through, the price rises seen in September are already locked in, making a January increase all but certain."
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