Energy price cap rises 4 per cent on Thursday

Household energy bills will rise on Thursday, when Ofgem's new price cap for October to December comes into force.

The cap for a typical household that uses both electricity and gas and pays by Direct Debit will be 1,723 pounds a year from 1 October to 31 December 2026. That is an increase of 60 pounds a year, or about five pounds a month, on the current level, a rise of about 4 per cent.

Gas drives the increase

Ofgem said most of the increase is driven by higher gas costs, with gas bills rising by 8 per cent. Households that do not use gas will see a much smaller increase of less than 1 per cent.

The rise reflects the sharp increase in wholesale energy prices this year. The Bank of England has noted that, since July, the price of Brent crude oil has risen by more than a third and UK wholesale gas prices by more than three quarters, as conflict in the Middle East has disrupted supplies.

What the cap means

The price cap does not limit the total amount a household pays. It limits the unit rates and standing charges that suppliers can charge customers on standard variable tariffs. The headline figure is based on Ofgem's measure of typical energy use, so people who use more will pay more and those who use less will pay less.

The cap is reviewed every three months, and the next change will take effect on 1 January 2027.

Help with bills

The increase comes as households head into the colder months, when energy use rises. Ofgem figures show that household energy debt has passed five billion pounds for the first time.

Anyone struggling to pay should contact their supplier as early as possible. Suppliers are required to offer support to customers in difficulty, which can include payment plans and access to hardship funds. Free, independent advice is available from organisations such as Citizens Advice.

In Birmingham, the city council's cost of living pages list local sources of help, including advice services and support with household costs.