Energy bills for UK households are set to rise by £35 from October, Ofgem has confirmed, despite previous predictions that prices would fall.
The regulator confirmed the 2 per cent rise in bills on Wednesday morning, meaning the average annual bill will rise from £1,720 to £1,755.
Bills had previously been forecast to fall in October by a similar amount.
At the last announcement in July, bills fell by around seven per cent from the previous cap set for April to June of this year, with lowered wholesale energy prices and supplier costs contributing to the change.
Part of the rise this time around can be explained by the expansion of the Warm Home Discount scheme for vulnerable households, which is expected to add around £15 to a typical bill, while also giving £150 in support to 2.7m extra people.
However, wholesale prices for electricity and gas remain volatile as a result of global political instability and uncertainty over US trade policy.
“While there is still more to do, we are seeing signs of a healthier market,” said Ofgem director general Tim Jarvis. “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.
“While today’s change is below inflation, we know customers might not be feeling it in their pockets. There are things you can do though – consider a fixed tariff as this could save more than £200 against the new cap. Paying by direct debit or smart pay as you go could also save you money.”
Those who will feel the rise hardest are often from lower-income households, says Sarah Pennells, consumer finance specialist at Royal London – and cutting down on using heat in winter may not be an option due to poor insulation.
“While the cap is intended to shield consumers on the standard variable tariff from excessive charges, it still means millions of households will face higher energy bills just as we head into the colder months, when energy use is at its highest. For many, especially those in poorly insulated homes, lower-income households, families with children, renters and those who retire on a low income, it’s not simply a case of turning the heating down. Many are already cutting corners where they can,” Ms Pennells said.
“Our Financial Resilience Research showed that over a third of adults (36 per cent) turned the heating down last year, with over one in five (22 per cent) turning it off completely, to save money.
“The rise comes at a time when wages are still catching up with inflation, food prices remain high, and interest rates continue to squeeze mortgage and rent payments. With many everyday costs having risen earlier this year, it’s worth reviewing other bills to see where savings can be made.”
Experts Cornwall Insight predict a small drop in energy bills for January 2026, but that will remain dependent on the above factors as well as weather and domestic matters, potentially including the autumn Budget.
The energy price cap peaked in early 2023 at £4,279 after surging in 2022 as a result of post-Covid energy demand surges, tight gas supply and the war in Ukraine. It had dropped back to £2,074 by mid-to-late 2023, remaining between £1,568 and £1,928 across last year and this.
“In the longer term, we will continue to see fluctuations in our energy prices until we are insulated from volatile international gas markets. That’s why we continue to work with government and the sector to diversify our energy mix to reduce the reliance on markets we do not control,” added Mr Jarvis.
Ofgem announces changes to the price cap for UK households every three months. The next change will be announced on 25 November, which will cover prices from the start of 2026 through to the end of March.
As a reminder, the price cap sets a maximum price that energy suppliers can charge households in England, Scotland and Wales for each kilowatt hour (kWh) of energy used. It is not a limit to each household’s bills – users pay for the amount of energy they consume.
The price cap applies to those paying bills as they receive them, by direct debit or on prepayment or E7 meters. Actual rates can vary depending on how bills are paid, region of the country and the type of meter.
