Gas and electricity bills are set to climb by 2% for millions of households across the United Kingdom, following the latest energy price cap announced by regulator Ofgem.
The adjustment, which comes in slightly above analyst forecasts, means a typical household will now spend £1,755 a year on energy, an increase of £35 compared with the current level.
The change takes effect in October and will last for three months, raising fears of another difficult winter for families already grappling with high living costs.
Ofgem’s cap limits the maximum cost per unit of gas and electricity in England, Scotland, and Wales, although total bills still depend on usage.
To calculate the impact, households can expect to add £2 for every £100 they currently spend annually on energy.
The hike comes at a time when families are being squeezed by broader cost-of-living pressures.
According to the British Retail Consortium, food prices are climbing at their fastest rate since February 2023, with staples such as chocolate, butter, and eggs rising sharply.
A history of price cap changes
Figures from Ofgem show that the energy price cap has fluctuated sharply in recent years. In January 2022, it stood at £1,216 before surging to £4,059 a year later.
However, the government’s Energy Price Guarantee limited typical bills to £2,380 between October 2022 and June 2023. Prices later eased to £1,568 in July 2024, before edging upward again to £1,717 in October, £1,738 in January 2025, £1,849 in April, and £1,720 in July. From October to December this year, the cap will rise slightly to £1,755.
The latest increase reflects not only wholesale energy costs but also higher transportation charges and government-backed support measures due to take effect this winter.
Support for vulnerable households
Anyone on means-tested benefits will automatically receive the £150 Warm Home Discount. Unlike in the past, property size will no longer determine eligibility.
The scheme, however, is being funded through higher standing charges, with electricity costs rising by 4% and gas by 14%, from 29p to 34p per kilowatt hour per day.
Consumer group Which? has urged households to consider fixed-price energy deals but warned, “Some contracts charge large fees to leave early, which would cancel out any savings,” said Emily Seymour from Which?.
Ofgem noted that more than one-third of customers are already on fixed deals. Tim Jarvis, its director general of markets, described this as evidence of a “healthier market.”
He admitted that many would still feel the pinch but encouraged people to explore savings options such as paying by direct debit.
Currently, around 20 million households pay via direct debit, while eight million use standard credit and six million rely on prepayment meters.
Campaigners remain concerned that many families are burdened by outstanding energy debts. Simon Francis, coordinator of the End Fuel Poverty Coalition, warned, “The average family still paying hundreds of pounds more than they did just a few years ago.”
Community-level response
In South Wales, Parc Primary School in Cwm Parc is working with the Fuel Bank Foundation charity to support families struggling with bills.
Family engagement officer, Leanne Gough, said, “We’ve got a high level of need, and over the last couple of years we’ve seen that more and more. People are really struggling. And not only with the fuel, but life in general.”
She added: “Sometimes you issue a fuel bank voucher and you can see the relief on their face, but it is a short-term. People are proud, so it takes a lot for them to come to ask. They will do everything they can beforehand.”
Political response
The UK government, which earlier reversed plans on winter fuel payments, insists it remains committed to protecting vulnerable households through the Warm Home Discount.
Energy minister, Michael Shanks, said ministers also wanted more domestic clean energy production to lower prices.
Energy UK, representing suppliers, argued that while the expanded Warm Home Discount was welcome, it should remain temporary, stressing the importance of better long-term targeting.
The opposition parties were quick to respond. The Conservatives claimed that rising bills were a direct result of government policy choices, while Liberal Democrat leader Ed Davey said, “The last thing families and pensioners needed was higher energy bills this winter.”