Millions of British households are facing a fresh financial blow today as the energy price cap increases, adding nearly £100 to typical annual bills despite wholesale costs falling.
The new Ofgem cap, which came into effect on October 1st, means the average household will now pay £1,928 per year for gas and electricity - a £94 increase from the previous quarter. This marks the first price rise in over a year and comes at the worst possible time as families prepare for winter.
Why Are Bills Rising When Wholesale Prices Are Falling?
Energy experts are questioning the timing of this increase, given that wholesale gas prices have actually decreased significantly in recent months. The apparent contradiction lies in how the price cap calculation works.
"The system is fundamentally flawed," explains energy analyst Sarah Thompson. "While wholesale costs have dropped, the cap allows suppliers to recover losses from previous periods when prices were higher. Essentially, consumers are paying for past market volatility."
Breaking Down the New Costs
Under the new arrangement:
- The average direct debit customer will see their annual bill rise to £1,928
- Prepayment meter users face slightly lower costs at £1,913 annually
- Standing charges remain at concerningly high levels
- Typical electricity unit rates increase to 27.35p per kWh
- Gas unit rates rise to 6.89p per kWh
Winter Worries for Vulnerable Households
Charities have expressed alarm about the timing, with the increase hitting just as temperatures begin to drop. Age UK warns that elderly residents may face the impossible choice between heating and eating this winter.
"This couldn't come at a worse time for families already struggling with mortgage increases and food inflation," says James Carter from National Energy Action. "We're deeply concerned about the health implications for those who will be unable to afford adequate heating."
What Can Consumers Do?
Energy experts recommend several steps to mitigate the impact:
- Submit regular meter readings to ensure accurate billing
- Check if you qualify for government support schemes
- Consider improving home insulation to reduce consumption
- Shop around for better deals, though switching options remain limited
- Contact your supplier immediately if you're struggling to pay
While the government maintains that the price cap protects consumers from even higher costs, many households will be wondering when - or if - they'll see meaningful relief from the energy crisis that began over two years ago.
