Ofgem raises energy price cap by 4% from October
Ofgem will lift the household energy price cap by 4% on 1 October, adding about £60 a year to the typical bill. The move follows rising wholesale gas prices linked to the Iran war and comes as the government cuts VAT on electricity. The change will affect 22 million households, while a third are on fixed tariffs and will not see a rise.
Cap increase details
Ofgem announced that the price cap will rise by 4% on 1 October, a figure that technically represents a 3.6% increase but is rounded for public release. The cap will lift by £60 a year - or £5 a month - to a new maximum of £1,723 for a typical household that uses both gas and electricity and pays by direct debit.
| Metric | Value |
|---|---|
| Price cap increase | 4% (3.6% technical) |
| Annual cap rise | £60 (£5/month) |
| New cap | £1,723 |
| Fixed tariff households | 35% (11 million) |
| Cap-affected households | 22 million |
| Typical gas usage | 9,500 kWh |
| Typical electricity usage | 2,500 kWh |
The regulator also noted that the new estimate of typical usage - 9,500 kWh of gas and 2,500 kWh of electricity a year - reflects a reduction in consumption as households have cut back during recent price spikes and improved energy efficiency.
Household impact
A typical household will pay roughly £60 more a year, but more than a third are on fixed tariffs and will not see a change. Ofgem said savings are available by choosing a fixed tariff, which can be £100 or more below the October price cap.
The price rise comes as colder weather arrives in October, and suppliers warn that energy debt has surged. Energy UK estimates total debt across the sector has risen to £6 bn and is expected to reach about £7 bn by the end of the year.
| Metric | Value |
|---|---|
| Energy debt total | £6 bn (expected £7 bn) |
| Average debt per household | £2,600 |
The increase is driven by wholesale gas prices, which are 61% higher over the past three months compared with late 2025. Bills have risen about 70% compared with pre-crisis levels, according to industry data.
Government response
Prime Minister Andy Burnham said the rise would be “difficult” for many but highlighted the government’s cut to VAT on electricity bills, which will save households £45. He also announced a warm-homes discount that will take £150 off bills for six million households this winter.
Opposition parties criticised the move. Shadow energy secretary Claire Coutinho said the government must “put cheap energy first”, pointing out that promised bill cuts of £300 have been eclipsed by nearly £400 increases. Liberal Democrat spokesperson Pippa Heylings urged the government to make “bold changes” to lower bills.
Former Prime Minister Gordon Brown called for a “machine gaming tax” to help those struggling, and suggested a social tariff for energy.
What to do if you need help
StepChange director Vanessa Northam noted that many people seeking help have high energy debt, averaging £2,600 on top of other commitments. The charity advises those approaching winter to:
- Review all household income and expenses
- Monitor energy usage and be wary of estimated bills that may be inaccurate
- Inform suppliers if they anticipate difficulty paying
- Seek support schemes offered by suppliers, but only if they are able to communicate their situation
Energy UK provides a list of support schemes, though companies can only help if customers inform them of their inability to pay.
The new cap will take effect as the winter season begins, adding pressure on households already coping with high energy costs.
