According to Ofgem, the energy price cap will rise to an average of £1,717 per year starting in October. This represents a 10% increase, or an additional £12 per month, in the typical household’s gas and electricity bill for those paying by direct debit.
The rise is primarily attributed to higher wholesale gas prices, with Ofgem advising bill-payers to “shop around” for fixed-rate deals that could offer savings.
The cap, which is adjusted every three months and limits what suppliers can charge per unit of energy, is around £500 higher than pre-Ukraine invasion levels, though it is £117 lower than in October 2023.
One significant change accompanying this rise is the Government’s decision to end winter fuel payments—up to £300 annually—for about 10 million pensioners who do not receive means-tested benefits, such as pension credit.
The likely rationale for this decision may be the recent dip in the energy cap, but charities warn that heating costs continue to strain households amid the ongoing cost of living crisis.
Research by Citizens Advice suggests that one in four people may be forced to turn off their heating and hot water due to record levels of energy debt. The Government’s energy strategy aims to reduce the country’s dependence on natural gas for heating and electricity by increasing investment in wind power, including onshore projects.
However, the immediate impact on vulnerable populations remains a pressing concern as winter approaches.
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