UK Household Energy Bills Set to Reach Three-Year High as Ofgem Confirms 4% Price Cap Increase from October

Energy prices for millions of UK households are set to reach their highest level in three years, driven by regulator Ofgem’s upcoming price cap.

This adjustment reflects the rising wholesale cost of gas, which suppliers have to absorb, and will impact household budgets just as the colder autumn weather sets in during October.

Ofgem announced that the price cap will rise by 4% compared to current levels, resulting in an average annual increase of approximately £60 for a typical household using both gas and electricity.

Fortunately, more than a third of households are currently protected under fixed tariffs, meaning their energy prices will remain unchanged despite this adjustment.

Energy suppliers have warned that household energy debt has surged, and with high bills expected to persist, they are calling for increased support measures for those struggling to afford payments.

In response, the government has announced a reduction in VAT on electricity bills starting in October, a measure that will benefit households on both variable and fixed energy deals.

Neil Kenward, Ofgem’s Director General for Markets, commented: “High international gas prices continue to be the primary driver of energy costs in the UK. We welcome the government’s intervention to remove VAT from electricity bills, without which customers would have faced even steeper costs this winter.

“Consumers can achieve savings of £100 or more by switching to a fixed tariff, which remains significantly below the October price cap.”

Approximately 35% of households—around 11 million—are already secured on fixed tariffs, leaving 22 million households across England, Wales, and Scotland subject to the upcoming price cap changes.

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