- The energy price cap will rise by £35 for an average household per year, from October
- Ofgem recommends considering a fixed rate tariff
- The price is based on typical household energy use
Energy bills for a typical household will rise by £35 a year from 1 October to 31 December 2025, energy regulator Ofgem has announced.
The rise means a typical dual-fuel household will see their annual bill rise to £1,755 per year from the current annual price cap of £1,720.
Ofgem’s energy price cap is set every three months and puts a limit on what suppliers can charge consumers for each unit of energy. It impacts the bills of more than 20 million households in England, Wales and Scotland, around 65% of households.
The increase, according to Cornwall Insight, is in part due to the expansion of the Warm Homes Discount. The scheme will provide 2.7 million extra households with a £150 reduction in their bills, as well as some changes to the network charges, the structure and components of the underlying cap models.
Direct debit and prepayment customers will also see standing charges increase, from 51.37 pence daily to 53.68 pence daily for electricity. Gas standing charges will increase from 29.82 pence daily to 34.04 pence daily.
However, the actual rates you are charged will depend on where you live, how you pay your bill and the type of meter you have.
For example, North West households will pay 51.16 pence per day standing charge and 27.11 pence per kWh for electricity.
Northern Scotland will pay 61 pence per day standing charge and 27.06 pence per kWh for electricity, and London households will pay 46.06 pence per day standing charge and 25.63 pence per kWh.
The energy price cap announcement also ensures prices for people on a default tariff (standard variable) are fair and reflect the cost of energy.
Households are covered by the price cap by either:
- Standard credit (payment made when you get your electricity and gas bill)
- Direct debit
- Prepayment meter
- Economy 7 meter
Electricity and gas unit prices from 1 October to 31 December 2025
The cost of electricity and gas per kWh changes every three months.
Until 30 September, electricity prices per kWh is 25.73 pence and gas per kWh is 6.33 pence.
From October, this will rise to 26.35 pence per kWh for electricity, whereas gas will drop slightly to 6.29 pence per kWh.
Households also pay a daily standard, which will be 53.68 pence for electricity and 34.03 pence for gas from July. All pricing is inclusive of 5% VAT.
Overall, a typical household will be paying £35 more a year for their energy bills.
For a full list of pricing for your region, check out the Ofgem website or our guide on What’s the price of electricity per kWh right now?
Energy Price Cap tracker
Take a look at how the energy price cap has changed since it was first introduced in January 2019 in our chart below.
Between October 2022 and March 2023, during a period of particularly high gas prices, the government provided households with £400 through the Energy Bills Support Scheme (EBSS). This was paid via monthly installments and was reflected on household energy bills.
While energy prices have come down significantly since that period, they have still not returned to pre-Covid-19 levels.
What are the most cost-effective ways to reduce energy bills?
If you’ve been pushing energy-saving solutions to the bottom of your to-do list, now is the time to change that.
Some changes require significant upfront costs, a huge barrier, especially as households are grappling with the cost of living crisis. However, others are low cost to install.
The first thing we recommend is check your house for any draughts. If you find the source, you can then research suitable solutions, as draught-proofing windows and doors can save you roughly £35 a year.
For your doors, you can get a draught door excluder – a long, stuffed, cushion-type device that’s heavy enough to block out draughts. It lays across the door and will prevent cold outside air from coming into your home. You will be able to buy these in most discounted retail stores or online for a small cost. Prices range from £4 to £30.
Other changes include:
- Install LEDs: Swap your bulbs for LEDs, each bulb can save up to £5 a year on electricity. You’re also less likely to need to replace them as often as standard bulbs
- Look after your fridge: Avoid putting warm food in it straight away as it works harder to cool down. Regularly clean it too.
- Utulise food waste apps: Apps, such as Too Good to Go, allow you to buy food at a discounted rate. They often go past their sell by date meaning stores can no longer stock it, but it’s still good to consume. This can help save money on lunches or other meals.
- Replace worn-out windows: Almost 45% of energy escapes from windows, so if you’ve yet to install double-glazing, it might be worth looking into.
- Insulate your home: There are different types of insulation to consider, such as cavity wall and pipe insulation.
Get a double-glazing quote
Answer a few simple questions, and a trusted double-glazing installer will be in touch with a bespoke quote for your home.
There are lots of other ways to reduce your energy bills, but you can dive into fourteen ways by using our guide.
Also check out our guide on improving your EPC rating, as this can also help reduce your energy bills overall.
Think about renewable energy options
According to The Eco Experts National Home Energy Survey 2024, more than half of homeowners cite reducing their energy bills as a key motivation for adopting low-carbon technology and renewable energy.
The most-common forms of low-carbon technology include:
The price of solar panels is a barrier for some, and one of the most popular questions we get asked is ‘how much are solar panels?‘ However, our page on solar panel costs should give you everything you need to know.
Get a solar panel quote
Answer a few simple questions, and a trusted solar panel installer will be in touch with a bespoke quote for your home or business.
Some will require high upfront costs, but there are government incentives to help:
- The Boiler Upgrade Scheme
- ECO4 Scheme
- Warmer homes Scotland
- Nest – for households in Wales
- Warm Homes Local Grant
There are a whole host of grants for solar panels, and some installers also offer finance options to help you spread the upfront costs.
What can you do if you’re struggling?
High bills in recent years have led to ballooning levels of customer debt to suppliers, with just under £4bn owed to suppliers.
Dame Clare Moriarty, chief executive, Citizens Advice, told the BBC that the latest energy price cap announcement would be “cold comfort to the millions paying off a mountain of debt on top of their monthly costs” and that the government must prioritise making homes more energy efficient.
“[The government] must provide more targeted energy bill support to those hardest hit, and upgrade 5 million homes with energy efficiency measures,” Moriarty said, commenting that while ministers have tried to support pensioners, people with children are “often struggling most of all with energy”.
If you’re struggling to pay your energy bills, the first port of call should be to contact your energy supplier.
You can ask about a payment plan that works for you, ask about any hardship funds or ask if you can pay smaller amounts more often.
Also check to see if you qualify for any grants or schemes from your local authority. Some charities have hardship funds, too. You might also qualify for benefits.
What are the early energy price predictions for January?
Cornwall Insight said its latest predictions for the January-April show a slight decline from the newly-announced October figures, standing at a forecasted £1,712 per year.
Dr Craig Lowrey, principal consultant, Cornwall Insight said that while the rise might look small on paper, it will “feel very real for households as we head into the colder months”. He put the rise in costs in part due to “widely supported expansion of the Warm Home Discount”.
“This (the Warm Homes Discount) will be a lifeline for many of the 2.7 million additional households now eligible for support, but for those still facing high bills, it will offer little comfort,” Lowrey explained. “The reality is, when we give more help to those who need it most, we all end up sharing the cost.
“There is better news on the horizon with bills currently expected to ease in January, driven by a forecast fall in wholesale prices. Normally, that drop would have meant even lower bills, however, rising policy costs, such as funding for new nuclear projects are keeping bills a little higher.”
Lowry added that as with the October cap, the January cap is also expected to introduce new non-wholesale elements to bills.
He said that chief among these is the Regulated Asset Base (RAB), which is expected to add just under £10 per year to a typical bill.
The RAB is a mechanism designed to support investment in new nuclear power stations by spreading the costs of construction (over around 10 years) and operation (over around 35 years) across consumer bills.
“While the costs covered by the RAB will started to be paid out before the end of this quarter, this has not yet been factored into bills – we anticipate that Ofgem will consult on how to include it within the cap formula within the coming months,” he said.
“We therefore anticipate that from January, the RAP charge will be incorporated into the cap, alongside an adjustment for the final two months of 2025.”
Cornwall Insight predicts that without the RAB charge, the typical dual-fuel household will have a baseline annual rate of £1,702.75. With the charge, it will increase to £1,712.20.
“These policy-driven costs are part of a broader shift in how we fund the energy transition. Nuclear will be a one of the cornerstones of a more secure and sustainable energy system, yet some of the funding will ultimately need to come from billpayers,” Lowry said.
“This is a difficult trade off – after all, everyone wants to see bills come down. However, the challenge we face is clear: if we want to build a resilient, low-carbon energy future, we must be prepared to invest in it today.”
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