OFGEM raise UK energy price cap by 10%, average UK household to pay £149 more for energy
OFGEM the UK energy regulator has announced a 10 percent increase in the energy price cap this October. This means the average UK household faces higher bills, as the winter months arrive and households start to turn the heating on.
The average home currently pays energy bills of £1,568 a year, but this will increase to £1,717 from 1 October with higher gas and electricity prices. From October the average electricity unit rate will increase to 24.5p per kWh from 22.36p per kilowatt-hour. Gas will rise to 6.24p per unit from 5.48p.
Standing charges are also increasing, the cap for standing charges for electricity will rise from 60.12p to 60.99p per day. The standing charge for gas, will increase from 31.41p to 31.66p.
Poorly insulated homes will see much bigger increases in energy costs
Homes with poor insulation and poor energy efficiency face the biggest impact of rising energy prices on bills.
Rightmoves energy bill tracker shows how EPC ratings affect energy costs for different types of property.
Energy costs in homes with a ‘C’ energy rating could pay around twice as much as those with an ‘A’ rating. Homes with a ‘D’ rating could pay around 3 times as much on energy and homes with a ‘E’ rating or worse could be paying 4 times more on energy bills than the most energy efficient homes.
The best fixed rate energy deals can beat the price cap
The energy price cap reflects the maximum rates for standard variable tariffs. A fixed-rate energy deal provides some certainty over the winter period. Fixed rate deals available now could provide cheaper energy than when price rises kick in this October.
If you are out of contract it is worth comparing energy prices and offers to see if you can secure a cheap fixed rate energy deal. The cheapest 12 month fixed energy tariff is currently £1,592, this represents an annual saving of £125 compared to the October price cap.
As prices are on the up again, act now to take advantage of cheaper energy deals and beat the electricity & gas price increases coming in October. WOW Compare energy prices today.
Will energy prices rise or fall in 2025?
The next energy price cap will be announced towards the end of 2024 and it is likely the new energy price cap in January will see a further increase in electricity and gas prices.
Analysts at Cornwall Insight believe there will be another ‘modest increase’ in energy prices when the next price cap comes into force in January 2025. So, from October, for at least 6 months households will have to prepare for rising energy prices and higher energy bills.
Quick energy saving tips - Reduce energy use and lower your energy bills
Households can implement energy efficiency measures and simple changes to reduce energy consumption. Improving your homes insulation and reducing heat loss is key to keeping your energy bills as low as possible.
In addition simple changes like turning your heating down a couple of degrees (21°C to 19°C) can reduce heating bills by 10-15%.
Check out our Energy Saving Guide for other ways to reduce energy, lower your bills and save money.