Energy bills to rise by £150 after Ofgem raises price cap

Households in Britain will face higher energy bills this winter after the regulator raised the price cap by 10 per cent.

- JANE DALTON ANDY GREGORY

Ofgem announced that the average home energy bill will increase from £1,568 to £1,717 on 1 October. This means a typical household’s annual energy bill will rise by £149.

The regulator sets the price limit for each unit of energy used based on several factors including wholesale energy prices – the amount energy providers pay for gas and electricity before supplying it to households.

The limit changes every three months – in January, April, July and October. Energy prices have fallen twice this year – in April and July – but are set to move back up. Those on standard variable tariffs paying by direct debit will pay on average 24.5p per kilowatt hour (kWh) for electricity and a daily standing charge of 60.99p, and 6.24p for gas with a standing charge of 31.66.

Nevertheless, average bills remain 6 per cent lower than a year ago and considerably lower than during the peak of the energy crisis, which was fuelled by Russia’s invasion of Ukraine, driving up costs in an already-turbulent energy market to a high of £4,059 in the first quarter of 2023.

Urging consumers to “shop around” and consider opting for a fixed-rate tariff, Ofgem chief executive Jonathan Brearley said: “We know that this rise in the price cap is going to be extremely difficult for many households.

“Anyone who is struggling to pay their bill should make sure they have access to all the benefits they are entitled to, particularly pension credit, and contact their energy company for further help and support.”

He added: “We are working with government, suppliers, charities and consumer groups to do everything we can to support customers, including longer-term standing charge reform, and steps to tackle debt and affordability.”