Ofgem has announced a 4% rise in the energy price cap from October, pushing typical household bills to £1,723 a year – a three-year high.
Quarterly cap increase
Ofgem announced this morning: "The quarterly energy price cap will rise by 4% from October 1, 2026. This will be an increase of around £5 per month for the average household. This is a cap on energy unit price plus standing charge, not a cap on total bills."
Reasons behind the rise
Neil Kenward, Ofgem's director general for markets, said: "High international gas prices are continuing to drive energy costs in the UK.
"We welcome the Government's intervention to remove VAT from electricity bills, without which customers would have faced even higher costs this winter.
"Savings are available by choosing a fixed tariff, which are available at £100 or more below the October price cap, and many suppliers offer tariffs with cheaper electricity to smart meter customers for electricity consumed out of peak times.
"It's also worth considering different payment methods, with prepayment customers paying the lowest price cap rates, and could save consumers an average of about £45 compared to direct debit."
Impact on households
MoneySavingExpert founder Martin Lewis had previously noted that the increase, driven by Middle East-related wholesale costs, largely offsets the Government's VAT cut on electricity.
