Energy prices: expert warns UK households to brace for energy bills going up as price cap increase approaches
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UK households are bracing for tighter budgets this winter ❄️
- UK households face higher energy bills from October, with the price cap set to rise by £17 a year
- The average dual-fuel bill will hit £1,737 between October and December
- Experts warn even small increases will hurt families already struggling with record energy debt
- Part of the rise comes from policy changes, including the expansion of the Warm Home Discount
- Money-saving experts urge households to check tariffs and avoid overpaying on bills
Households across the UK face a fresh squeeze on their budgets this winter, as energy bills are set to edge higher from October.
Ofgem, the UK’s energy regulator, is due to announce its latest energy price cap update on Tuesday (August 27).
The energy price cap is a limit set by Ofgem on the maximum amount energy suppliers can charge households per unit of gas or electricity.
It doesn’t cap total bills, as customers still pay for how much energy they use, but it’s designed to protect consumers from excessive prices.
Forecasts suggest that the typical household’s annual bill will rise by around £17, bringing the average dual-fuel bill to £1,737. The new rates will apply from October 1 through to the end of December.
Although the increase amounts to just 1%, experts warn that even a small rise will feel painful for families already stretched by years of high costs since the energy crisis began.
“Energy bills are set to increase just as winter sets in and our usage goes up,” says Greg Marsh, household finance expert and CEO of money-saving service Nous.co.
“Bills are still far higher than before the crisis, and many families simply won’t be able to afford to heat their homes. Debt on energy bills is already at record levels, and without intervention this will continue to climb.”
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Why might the energy price cap go up?
Analysts at Cornwall Insight, who often correctly predict price cap increases, said part of the hike comes from government policy changes rather than external market forces.
The expansion of the Warm Home Discount scheme, designed to support an additional 2.7 million vulnerable households with £150 payments, has added around £15 to the average annual bill.
Dr Craig Lowrey, principal consultant at Cornwall Insight, says: “While the added costs are aimed at supporting those most in need, it does mean typical bills will increase despite relatively lower wholesale costs. It’s a reminder that the price cap reflects more than just the market price of energy.”
While those wholesale energy may be “relatively lower”, they remain “volatile” and subject to change, reflecting geopolitical tensions, US trade policy uncertainty, and fluctuating demand.
What can I do to avoid the rise?
Money-saving experts are urging consumers to stay vigilant. Marsh stresses that too many households still overpay because energy companies make it “deliberately difficult” to navigate bills and tariffs.
“At Nous, we typically save customers hundreds of pounds a year on bills because they didn’t have the time or headspace to stay on top of things, and didn’t realise they were paying far more than they needed to,” he said.
“With the cost of keeping our homes warm still so high, it’s crucial none of us pays more than we need to.”
Will energy prices ever come down?
Cornwall expects a slight dip in bills in January, but warns that future movements depend heavily on geopolitical events, weather conditions, and government policy, and energy bills remain far above pre-crisis levels, and sharp falls are unlikely any time soon.
Ofgem’s ongoing review of how energy system costs are shared could redistribute charges between households, meaning some may eventually see savings, while others could face higher costs.
For now, experts say the best strategy is to check bills carefully, avoid unnecessary overpayments, and make the most of any available support schemes.
Lowrey adds: “The real hope for lasting relief lies in the longer-term transition towards clean power and energy independence. That offers the greatest prospect of both stability and lower costs.”
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