Energy Price Cap latest: unexpected 2% hike coming in October
Price hike will kick in just as household energy usage soars, but bills are forecast to fall back again in January 2026.
Annual energy bills will rise by £35 on average in an unexpected blow for households.
Ofgem has confirmed that the Energy Price Cap, which sets out the maximum amount suppliers are allowed to charge customers per unit of energy and is revised every three months, is set to increase by 2% from £1,720 to £1,755 at the start of October.
It means the cap will have increased in four of the last five quarters, heaping more pressure on household budgets.
The latest jump has come as a surprise: just last month, energy analysts at Cornwall Insights had forecast the price would actually fall to £1,698.
There might be some good news in the pipeline, with various analysts expecting the price cap to fall by 3% at the start of 2026, meaning energy bills could be a little more manageable during the second half of the high usage months.
Of course, that isn't certain, given that accurately forecasting changes is a demonstrably difficult task.
Why are prices rising?
The impending October increase has little to do with rising wholesale energy costs.
Instead, Ofgem has attributed it to an extension of the Government’s Warm Home Discount scheme, which subsidises bills for low-income households, as well as an increase in the cost of running the energy network.
Shop around for a cheaper energy deal with Uswitch and save up to £252 (opens in new page)
Many can’t afford to turn on the heating
Campaign group, the National Pensioners Convention, has warned that more than 12.1 million households are already struggling with their energy bills.
It added that two-fifths (43%) of UK households are spending more than 10% of their household income on gas and electricity, with as many as five million households spending more than 20% of their income on energy, meaning they are in deep fuel poverty.
Commenting on the findings, Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “Fuel poverty is very much still with us and these figures highlight how vital schemes like the Warm Home Discount are to help those struggling each year.
“But we are now approaching the fifth Winter of the energy bills crisis and the time for tinkering with the price cap is over.
“The average household is still paying 67% more for their energy than in winter 2020/21."
Switch, use less, get help
The October price rise may not be massive, but for those already at or near the limit, it can certainly feel like it.
So what can you do if you're struggling with your energy bills, or simply want to fight back against constantly rising prices?
We’re at risk of sounding like a broken record on this, but the quickest and easiest step you can take is to switch to a cheaper energy deal.
Many energy suppliers offer fixed-rate tariffs that are notably cheaper than the Energy Price Cap.
In fact, Uswitch estimates you could save up to £252 just by switching to a cheaper deal. If you haven’t already done so, take a few minutes to lock into a cheaper deal now.
Once you’ve done that, it’s time to take steps to use less energy and, if you’re still struggling, look at what help you qualify for.
Read the following two guides for more information:
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Shop around for a cheaper energy deal with Uswitch and save up to £100 (opens in new page)
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