Energy prices will rise this winter by an average of nearly £3 a month, after Ofgem announced its new price cap. The price cap changes every three months, with the latest one set to take effect from October 1 and continue through to the end of the year.
The new cap means that the typical household will pay £1,755 annually for gas and electricity, for a standard dual-fuel direct debit plan. That’s an increase of about 2%, representing an extra £35 a year on average, or £2.93 per month.
Latest figures show more than a third of customers (37%) are now on fixed tariffs, which means they are protected from the upcoming rise. Despite the rise, costs will be £625 (26%) lower than at the height of the energy crisis at the start of 2023 when the government implemented the energy price guarantee.
The impact of these changes will vary from household to household, depending on how much fuel you use. The cap does not limit household total bills – the £2.93 monthly rise is based on typical usage – but rather the amounts charged per unit and the daily standing charge.
You can estimate how much your bill will drop from July using our energy bills calculator below.
Tim Jarvis, director general of markets at Ofgem, said: “While there is still more to do, we are seeing signs of a healthier market. There are more people on fixed tariffs saving themselves money, switching is rising as options for consumers increase, and we’ve seen increases in customer satisfaction, alongside a reduction in complaints.”
Ofgem says shopping around for a fixed tariff could save consumers more than £200 compared to the upcoming price cap level. Changing payment methods from standard credit to direct debit can also help reduce costs.
Currently, eight million customers pay by standard credit, but they could make savings of £135.60 with one simple switch. Ofgem has also introduced rules to ensure anyone struggling with their bills gets the help they need from their supplier.
That could include tailored repayment plans, which can help households regain control and avoid falling further behind, or providing emergency credit to reduce the risk of self-disconnection.
