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Household energy bills to rise by 2% from October 1

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UK Energy Bills to Rise by 2 % from October 1: What Households Need to Know

On Monday, the Department for Business, Energy and Industrial Strategy (BEIS) confirmed that the energy price cap—a regulatory ceiling on how much suppliers can charge for electricity and gas—will climb by 2 % from 1 October. The change will apply automatically to all households on standard variable or fixed‑price tariffs and will be reflected on their next monthly bill. The decision comes amid a continued push by the government to temper the impact of soaring wholesale energy prices on the average British consumer.

How the Energy Price Cap Works

The energy price cap is the single most powerful tool the UK government uses to protect households from unpredictable spikes in energy costs. Set by Ofgem, the independent energy regulator, the cap is calculated monthly from wholesale market prices, a “retail spread” that covers the cost of retailing energy, and a reasonable profit margin for suppliers. The regulator publishes the cap on its website each month, and suppliers are legally required to offer a tariff that does not exceed the capped rate. If a supplier’s tariff is above the cap, it must either lower its price or risk enforcement action.

For most households, the cap is most visible on the “Energy Price Cap” page on GOV‑UK, which explains the methodology in plain language and provides a quick calculator for consumers to see how a cap rise could affect their annual bill. (Link: https://www.gov.uk/guidance/energy-price-cap)

The Numbers Behind the 2 % Rise

The current electricity cap stands at £0.94 pence per kWh (as of the June 2023 review), while the gas cap sits at £1.16 pence per kWh. A 2 % increase translates into:

  • Electricity: £0.94 p × 1.02 = £0.9608 p per kWh
  • Gas: £1.16 p × 1.02 = £1.1832 p per kWh

These modest rises might seem small on a per‑kWh basis, but they can add up over a year. A household that consumes the national average 4,800 kWh of electricity and 2,300 kWh of gas will see an additional £70–£80 per year in bills – roughly £6–£7 extra each month. The increase is applied automatically, so consumers need not take any action to adjust their tariff; suppliers will roll the new rate into the next monthly invoice.

Why the Cap Is Being Raised

The government cited the recent volatility in wholesale gas prices – a sharp uptick in the summer of 2023 following supply constraints in Russia and the European market – as the primary driver for the adjustment. “The energy price cap must reflect the current cost of delivering electricity and gas to households, while still protecting consumers from excessive prices,” a BEIS spokesperson said. The 2 % hike is the smallest change in the past year, signalling a move toward stabilisation after a period of steep increases (the cap had jumped by 13 % in July 2023).

Supporting the Most Vulnerable

The cap rise is part of a broader suite of support measures aimed at easing the burden on low‑income households. The Energy Company Obligation (ECO) – a scheme that requires suppliers to install free or low‑cost energy efficiency measures in eligible homes – continues to deliver savings of up to £250 per year for qualifying households. (Link: https://www.gov.uk/energy-company-obligation)

In addition, the Energy Bill Support Scheme (EBSS), introduced in 2022, allows vulnerable households to apply for a one‑time payment of up to £400 or a recurring monthly payment of up to £100. The scheme is designed to cover the difference between the energy bill and a £2,000 yearly ceiling that was in place before the guarantee was lifted in March 2023. (Link: https://www.gov.uk/energy-bill-support-scheme)

How to Keep an Eye on Your Bill

  • Check your current tariff: Visit your supplier’s website or call customer service to confirm you’re on a standard variable or fixed tariff that is subject to the cap. Some high‑speed or “green” tariffs may have different rate structures.
  • Use the online calculator: The Government’s energy‑price‑cap page includes an interactive calculator that lets you estimate the impact of a cap change on your annual bill based on your past usage.
  • Review your energy supplier: If you’re dissatisfied with your current supplier’s rates or customer service, you can switch companies at any time – though you’ll need to be on a regulated tariff to benefit from the cap.

What Comes Next

Ofgem will continue to review the cap on a monthly basis, and suppliers are expected to align their tariffs within 10 days of the new cap being announced. The 2 % increase is a signal that wholesale energy costs are beginning to plateau, but the regulator remains vigilant. If prices rise sharply again, Ofgem could raise the cap further; if prices fall, the cap could be lowered, offering some relief to consumers.

For more detailed information on how the cap is calculated and how it affects different types of households, visit Ofgem’s page on the energy price cap (https://www.ofgem.gov.uk/publications-and-data/energy-price-cap).


Bottom line: Starting 1 October, every UK household on a standard tariff will see its maximum allowable energy price rise by 2 %. The change is modest on a per‑kWh basis but can add roughly £6–£7 a month to an average household’s bill. While the government’s other support schemes provide help for the most vulnerable, consumers should stay informed and review their tariff options to ensure they’re getting the best deal under the new cap.


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