Ofgem Confirms 2% Energy Price Cap Rise from October

Although the increase is unwelcome for many households, bills remain substantially lower than during the peak of the energy crisis in 2023. At that time, the price cap was more than £2,300 a year, meaning today’s figure is still around £625 lower. Nevertheless, the return to rising bills comes only two months after a 7% cut in July, and will be a disappointment to households hoping for longer-lasting relief.

The new cap will affect all customers on standard variable tariffs, whether paying by direct debit, on receipt of bill, or through prepayment meters. Around 37% of households are now on fixed-rate tariffs, which are not impacted by this change. Industry analysts had expected a modest rise of around 1%, but the 2% increase has slightly exceeded forecasts.

For consumers, the decision raises once again the question of whether to move to a fixed-rate tariff. Some fixed deals currently available are priced below both the present and forthcoming cap, offering potential savings for those willing to lock in. However, with wholesale markets still volatile and the next cap review due in January 2026, there remains uncertainty over whether bills will rise further or fall back in the months ahead. Households will need to balance the security of fixing against the possibility of future reductions.

Payment method continues to play an important role in the overall cost of energy. Direct debit usually remains the cheapest option, while those on prepayment meters or paying on receipt of bill face higher charges. Customers struggling with affordability are encouraged to contact their supplier as soon as possible, as firms are obliged to offer support measures such as repayment plans or emergency credit. Vulnerable households are also advised to register for the Priority Services Register, which provides tailored assistance and protections.

With the new rates taking effect from October, it will also be important for households to provide meter readings before the end of September. This ensures that usage up to that point is billed at the lower summer rates, rather than being estimated at the higher tariff.

While the 2% rise is modest compared with the turbulence of recent years, it underlines the continuing sensitivity of bills to changes in policy and market costs. As the next review approaches in early 2026, households will be watching closely to see whether this upward movement marks the start of a new trend or a temporary adjustment.

Sources