Energy price cap rise: households face £35 annual increase under Ofgem’s new cap

Millions of households across Britain will see their energy bills rise this autumn as the regulator Ofgem confirms a 2% increase in the price cap.

From October, a typical household will pay £1,755 a year, around £35 more than at present. The cap limits the maximum price suppliers can charge per unit of gas and electricity, though individual bills will still depend on how much energy is used.

The rise is slightly higher than analysts predicted and comes at a time when families are already facing pressure from rising food costs. Recent figures show items such as butter, eggs and chocolate are among the fastest increasing staples.

Ofgem adjusts the cap every three months, based largely on wholesale market costs. This latest rise is also driven by higher charges for transporting energy and funding consumer support measures announced earlier in the year. These include an expanded Warm Home Discount scheme, which will see anyone on means-tested benefits receive £150 off their bills. Rules that excluded some households based on property size are being removed, widening eligibility.

However, the changes mean standing charges are also rising. Electricity standing charges will increase by about 4%, while gas will rise by 14% — moving from 29p per kilowatt hour a day to 34p. Critics say this leaves many customers paying more simply to stay connected, regardless of usage.

Energy regulator Tim Jarvis said the rise reflected a “healthier market”, with more than a third of customers now on fixed deals that are unaffected by the cap. Around 20 million households pay by direct debit, with eight million on standard credit and six million using prepayment meters. He acknowledged that households would still feel the pressure but encouraged consumers to consider fixed tariffs or payment by direct debit to save money.

Consumer groups, meanwhile, advise caution. Which? has warned customers to check exit fees before switching to fixed tariffs, as charges can wipe out any savings.

Campaigners argue that, despite market stabilisation, families are still struggling. Around £4bn of energy debt remains from the years of soaring bills. Simon Francis of the End Fuel Poverty Coalition said the latest rise meant another difficult winter, with families still paying far more than they did a few years ago.

Some relief is coming from community initiatives. In the Rhondda Valley, Parc Primary School works with the Fuel Bank Foundation to provide vouchers for families struggling to meet energy costs. Staff there describe the visible relief when a voucher is issued, even though it only offers short-term respite.

The government said it was determined to protect vulnerable households by expanding the Warm Home Discount, while Energy Minister Michael Shanks pointed to the need for greater investment in domestic clean energy to bring prices down in the long term. Industry group Energy UK said expanded discounts should remain temporary, with more targeted help for those most in need.

Opposition parties criticised the rise, with the Conservatives blaming government policy and Liberal Democrat leader Ed Davey arguing that higher bills were “the last thing” families and pensioners needed this winter.

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