British households are bracing for another increase in energy costs this October, with Ofgem’s new price cap set to raise bills by 10 percent.
This adjustment means that a typical duel-fuel household will see their annual energy bills surge by £149, bringing the average bill to £1,717.
This increase affects homes across England, Scotland, and Wales, where the price cap regulates the cost of gas and electricity for around 27 million households.
While the new cap is six percent (£117) cheaper compared to the same period last year (£1,834), analysts say another rise in prices is likely in January.
However, it should be noted that the actual amount a household will pay depends on how much energy they use, where they live and the type of meter they have.
How much will energy bills rise in October?
Ofgem reviews the energy price cap every three months. The cap is set for England, Wales and Scotland for each unit of gas and electricity.
Between October 1 and December 31, gas prices will be capped at 6.24p per kilowatt hour (kWh), up from the current 5.48p, while electricity will be capped at 24.5p per kWh, rising from 22.36p.
On average, a household consumes 2,700 kWh of electricity and 11,500 kWh of gas annually.
Households using prepayment meters will see slightly lower bills compared to those on direct debit, with an average cost of £1,669.
In contrast, those who settle their bills quarterly by cash or cheque will face higher costs, averaging £1,829.
Meanwhile, widely criticised standing charges, which cover the cost of connecting to a supply, will increase to 61p per day for electricity and 32p per day for gas, up from 60p and 31p respectively. These charges may vary by region.
However, Ofgem has announced that it is looking into ways to change the standing charge billing system to reduce costs for households. It is asking energy suppliers to offer energy tariffs that have no or low standing charges as well as their current tariffs.
Consequently, energy consumer minister Miatta Fahnbulleh has invited the heads of the energy suppliers to meet on August 28 to discuss how to support the most vulnerable with their bills.
Myron Jobson, senior personal finance analyst at interactive investor, commented: “The hike in the energy price cap is a double whammy for pensioners living on the breadline who no longer qualify for the winter fuel allowance.
“On one hand, they face an uptick in energy costs, while on the other, they’ve lost a crucial financial support that once helped them manage these bills. This harsh combination risks plunging many into deeper financial hardship.”
He added: “The increase in the energy price cap serves presents a timely opportunity for households to review their current energy tariffs and ensure they’re paying a competitive rate.
“It is worth shopping around and compare rates, but don’t overlook the fine print—particularly any exit fees that could eat into your savings. Taking time to assess all costs involved can help ensure you’re getting the best deal in the long run.”
