Energy Price Cap Rises £60: What You’ll Pay and 6 Checks to Make Before Winter

What does the energy price cap rise mean for your bills?

The energy price cap limits how much suppliers can charge for each unit of gas and electricity, together with the daily standing charge, for customers on default tariffs in England, Scotland and Wales. Ofgem’s confirmed October rates run from the 1st of October until the 31st of December. Your actual bill is then calculated using those rates and the amount of energy your household consumes.

For a Direct Debit customer, the average electricity unit rate increases slightly from 26.11p to 26.32p per kWh, while the average electricity standing charge falls from 57.19p to 54.83p a day.

Gas changes more sharply, with the average unit rate rising from 7.33p to 7.97p per kWh and the standing charge moving from 29.04p to 29.68p a day. These are Great Britain averages, so the exact rates on your bill can differ by region and payment method.

Charge	Current cap	From the 1st of October
Typical-use annualised figure	£1,663	£1,723
Electricity unit rate	26.11p/kWh	26.32p/kWh
Electricity standing charge	57.19p/day	54.83p/day
Gas unit rate	7.33p/kWh	7.97p/kWh
Gas standing charge	29.04p/day	29.68p/day
VAT on electricity	5%	0%
VAT on gas	5%	5%

Ofgem says typical gas costs rise by around 8%, while households that don’t use gas should see a much smaller increase of less than 1%. Wholesale energy prices have risen by 11% over the previous three months, with higher international gas prices driving much of the change. Without the electricity VAT cut, Ofgem says its typical-use figure would have been around £45 higher.

Why is £1,723 not the maximum you can pay?

The £1,723 energy price cap figure is an illustration based on a defined level of typical household consumption rather than a ceiling on your bill. Ofgem’s latest Typical Domestic Consumption Values assume annual usage of 2,500kWh of electricity and 9,500kWh of gas.

A household using more than those amounts can pay considerably more, while somebody using less should pay less.

This also explains why comparing today’s £1,723 headline directly with some older price-cap figures can be confusing. Ofgem recently reduced the amount of energy it assumes a typical household uses when presenting the price cap, and says the current £1,663 figure would have been £1,862 using the previous consumption benchmark, rising to £1,935 from October.

The apparent drop in the headline figure therefore comes from changing the consumption assumption rather than energy suddenly becoming cheaper.

Your own annual consumption figures are much more useful when comparing tariffs. Look at your latest annual statement or supplier app for the number of kWh of gas and electricity you actually use, then use those figures when checking another tariff. This will give you a far better estimate than assuming your household should somehow come in at £1,723.

Why is gas getting more expensive than electricity?

Gas accounts for most of this energy price cap increase. Ofgem says typical gas bills rise by around 8%, while electricity costs remain much closer to their current level because the new zero VAT rate offsets much of the pressure from higher wholesale costs.

Households that rely heavily on gas heating could therefore feel more of the increase than electricity-only homes.

This is particularly relevant for households already struggling with heating costs. National Energy Action says more than seven in ten fuel-poor households heat their homes with gas, so the part of the bill rising fastest is also the fuel used for heating by many financially vulnerable households. The charity has called for more targeted bill support and measures to deal with historic energy arrears.

The autumn timing also matters because households tend to use more gas once heating goes back on. An annualised increase of £60 might sound relatively small when divided into £5 a month, but household energy use isn’t evenly spread across the year. The months when the new rates first apply are also the months when many gas-heated homes start using considerably more energy.

How does the electricity VAT cut work?

VAT on household electricity falls from 5% to zero from the 1st of October. The Government says the change should save a typical household around £45 a year, with suppliers expected to apply the reduction automatically rather than requiring customers to claim it. The zero rate applies to electricity usage and the electricity standing charge.

The reduction also applies if you are already on a fixed energy tariff. Prepayment electricity customers benefit too, because VAT will no longer be deducted when credit is added to their meter. Under the current arrangements, electricity remains zero-rated through the winter while gas continues to carry 5% VAT.

The £45 saving doesn’t mean the typical dual-fuel bill falls by £45 because gas is moving in the opposite direction. Ofgem says the October cap would have been around £45 higher without the VAT change, so the tax reduction has limited the increase rather than turning it into a reduction.

Electricity-only households should see more of the benefit because they avoid the larger increase affecting gas.

Does the energy price cap affect you if you’re on a fixed tariff?

The 4% energy price cap increase doesn’t change the rates you’ve already agreed on a fixed energy tariff. Ofgem estimates around 11 million households are currently on fixed deals, which means their agreed tariff rates aren’t being reset to the new default price-cap rates in October.

The electricity VAT reduction still applies, so fixed-tariff customers can benefit from that part of the change.

If your fixed deal ends soon, check what tariff your supplier intends to move you onto and compare it with alternatives before the end date arrives. Pay attention to the unit rates, standing charges, contract length and any exit fees rather than looking only at an estimated monthly Direct Debit.

Your Direct Debit can also include adjustments for credit or debt on the account, so it isn’t always a reliable way to compare the actual cost of one tariff against another.

Around 35% of households are currently on fixed tariffs according to Ofgem. That is a much larger proportion than during periods when most customers remained on standard variable tariffs, which means a price-cap announcement now affects households differently depending on the type of deal they already have.

Should you fix your energy tariff before winter?

A fixed tariff could currently cost less than the new energy price cap, but you need to compare the full tariff rather than the headline saving. Ofgem says fixed deals are available at £100 or more below its October typical-use figure, which gives default-tariff customers a reason to look at what is currently available. A fix also gives you more certainty about the rates you’ll pay for its agreed term.

There is a trade-off because variable rates could later fall while you remain tied to the fixed rate. Check any exit fee as well, since a large charge could make it expensive to move if a substantially cheaper deal appears later. Ofgem is due to announce the next price-cap level by the 25th of November, covering prices from January onwards.

Compare deals using your own annual energy consumption wherever possible. A tariff advertised as being £100 below the cap is normally comparing typical consumption rather than guaranteeing your own household will save £100. Unit rates and standing charges tell you far more about whether the deal fits your usage.

Could Nous help check whether you’re overpaying for energy?

Nous is another option if you want help keeping an eye on household bills without repeatedly running comparisons yourself. The service can monitor energy alongside broadband, mobile and mortgage costs, track contract dates and flag alternatives when it believes there may be a saving. Its free tier currently lets you manage up to two household services, so energy could be one of the bills you use it to monitor.

I recently put Nous to the test and it found around £300 a year in possible savings on my energy, despite me already being fairly confident that I had compared my tariff carefully. I couldn’t immediately take advantage of the proposed saving because I’m currently partway through a fixed agreement, where leaving early could wipe out some or all of the benefit.

Across the household bills I checked, Nous identified more than £400 of possible annual savings, so I intend to run the checks again when those contracts reach their renewal points.

You can read exactly what happened in my Nous review, including the costs, the different levels of control and the limitations I found. A Nous proposal shouldn’t be treated as proof that you have found the cheapest tariff across the entire market because it works with a selection of providers.

Check any proposed unit rates, standing charges, contract length and exit fee before agreeing to move.

Why are debt charities worried about another energy price rise?

Energy debt is already at record levels before the new winter rates begin. Energy UK says household energy debt and arrears have reached around £6 billion, while StepChange says average energy arrears among its clients with energy debt reached £2,673 during the first half of this year. That StepChange figure is more than £200 higher than the comparable figure from the previous year.

Separate StepChange polling found 29% of adults in Great Britain were worried about their ability to pay their energy bills over the next six months. Among people responsible for bills, 45% said they had taken action to reduce energy use during the previous three months. Those figures come from a different survey to the research showing 41% expect their overall finances to worsen, so they shouldn’t be treated as results from the same study.

That distinction matters because concern about future finances isn’t the same as already being in problem debt. A household can be paying every bill today and still see that a higher winter energy bill will leave too little money for other essential spending. Identifying that gap before payments are missed gives you more time to check support, contact providers and change spending where it is genuinely possible.

What help is available with energy bills this winter?

Around six million households are expected to qualify for the £150 Warm Home Discount this winter following an expansion of the scheme. The discount is separate from the electricity VAT reduction, so an eligible household can benefit from both forms of support. Check the official eligibility information because how the scheme works differs between parts of Great Britain.

If you think you will struggle to pay your energy bill, Ofgem says you should contact your supplier as soon as possible. Suppliers must support customers experiencing payment difficulties and may be able to agree an affordable repayment plan, give more time to pay or direct you towards other financial support. Waiting until several unpaid bills have accumulated can leave a much larger balance to deal with.

You can also use free debt advice if energy arrears are part of a wider problem with household finances. StepChange, Citizens Advice and MoneyHelper can all provide free guidance, and StepChange has warned that imposter businesses have appeared in online advertising pretending to be the charity. If you specifically want StepChange, use its official website rather than following an unfamiliar advert.

What can you do now if you’re worried about your finances?

StepChange has partnered with Monzo £ through its “Debt shouldn’t be the cost of living” campaign to encourage people to look at their finances before problems grow. The six areas it highlights cover budgeting, regular bills, benefits, savings and seeking help rather than relying on a particular bank or financial product. You can follow the same approach with your existing accounts, a spreadsheet or whatever budgeting method works for you.

1. Create a payday routine

Start with the money actually coming into your household and identify the bills that must be paid before the next payday. Housing, Council Tax, energy and other priority payments should be separated from money available for less essential spending, particularly if the budget is tight. The MoneyHelper Bill Prioritiser can help if there isn’t enough money to cover everything.

Monzo’s Pots and Salary Sorter are examples of banking tools that can separate money for particular purposes before it gets absorbed into everyday spending. I’ve also covered the wider budgeting and money-management features in my Monzo review. You don’t need to move your main bank account simply to start separating bill money from spending money.

2. Check what your energy is actually costing you

Open your latest energy statement and find your electricity and gas unit rates, standing charges and annual consumption in kWh. Check whether you are on a fixed or variable tariff and whether the account is currently in credit or debt, then compare those figures with the new Ofgem rates. This makes it much easier to see what the October energy price cap change could mean for your household.

Don’t judge the account only by the monthly Direct Debit. Your payment can be higher or lower than your underlying energy use because suppliers may adjust it to account for credit, debt or expected seasonal consumption. If the proposed Direct Debit looks wrong, ask the supplier to explain the calculation before simply cancelling it.

3. Review your other household bills and subscriptions

Go through several months of bank statements and identify recurring payments that may have been overlooked. Broadband, mobile contracts, insurance, streaming subscriptions, memberships and software are all worth checking, particularly where a contract is approaching renewal. Annual and quarterly payments can be easier to miss than Direct Debits leaving every month.

This is another place where Nous may be useful because it can keep track of several household contracts and flag possible savings when deals change. If you prefer doing the comparisons yourself, set calendar reminders a few weeks before contract end dates instead. The aim is to stop an old deal drifting onto a more expensive rate simply because nobody checked it.

4. Check whether you’re missing financial support

Your entitlement to benefits can change when income, housing costs, work, childcare or household circumstances change. The free StepChange benefits calculator can give you an indication of support that may be available, while other free benefits calculators can provide a second check. Any result still needs to be confirmed through the relevant official benefit system.

Energy-specific help should be checked at the same time. The Warm Home Discount is worth £150 for eligible households, and some energy suppliers also operate hardship funds or other forms of assistance for customers struggling with bills. Ask your own supplier what is currently available because support differs between companies.

5. Build a small emergency buffer if there’s room

An emergency fund can stop a smaller unexpected bill immediately becoming new borrowing, but saving needs to fit the reality of your household budget. If there isn’t enough money for food, housing, energy or other priority costs, forcing money into a savings account can make the current shortfall worse. In that situation, dealing with the shortfall and getting advice comes first.

If there is money left after essential costs, small transfers can still start building a buffer. Banking apps can automate transfers or round up purchases, while an ordinary standing order into a separate savings account can do much the same job. My guide to why emergency funds matter looks at how having money set aside can reduce the need to borrow when an unexpected expense arrives.

6. Ask for help before arrears grow

You don’t need to wait until several bills have been missed before contacting your supplier or a debt adviser. Ofgem says energy suppliers must help customers who tell them they are struggling, and support can include affordable repayment arrangements, more time to pay or access to other assistance. Explain what you can genuinely afford rather than agreeing to a repayment amount that creates another shortfall elsewhere.

Energy arrears are treated as a priority debt because the consequences can be more serious than falling behind with some unsecured borrowing. Rent or mortgage, Council Tax and certain other liabilities also sit within the priority category, so paying whichever creditor is shouting the loudest isn’t always the right approach. Free debt advice can help you put the payments into an order that reflects the consequences of missing them.

StepChange’s official helpline is 0800 138 1111, and its online debt advice is also free. If you would prefer another source of help, Citizens Advice and MoneyHelper offer free guidance as well.

Using a recognised free service can be particularly useful before agreeing to any paid debt-management service.

Can you cut your energy use as well as changing tariff?

Reducing the amount of energy you use can lower the bill regardless of which tariff you are on, because the price cap doesn’t limit your total spending. Small changes are unlikely to cancel out every price rise, but reducing unnecessary consumption means fewer units being charged at the new rates. My guide to practical ways to reduce gas and electricity bills covers changes around heating, hot water, appliances and everyday use.

Be careful with advice that involves simply going without heating when your home needs it. Cutting waste is different from making a home uncomfortably cold, particularly for older people, young children or anyone whose health can be affected by low temperatures. If keeping the home adequately heated is becoming unaffordable, speak to the supplier and check financial support rather than relying only on using less.

It is also worth taking regular meter readings if you don’t have a smart meter sending them automatically. Accurate readings reduce the chance of long periods of estimated billing and make it easier to compare what you are actually using from one month to the next. Keep a record if your consumption changes sharply and you can’t explain why.

What should you check before the new energy price cap starts?

Before the 1st of October, download your latest energy statement and write down your gas and electricity consumption, unit rates, standing charges, tariff end date and current account balance. Compare those figures with the new Ofgem rates and any fixed tariffs you are considering, then run the same bill through Nous or another comparison method if you want a second view. That gives you a household-specific comparison rather than relying on the national £1,723 headline.

Next, look at the wider household budget and work out whether expected winter bills still fit alongside rent or mortgage, Council Tax, food and other priority costs. Check benefits and energy support if anything in your household has changed, and contact the supplier early if the numbers show a shortfall. If debt is already building, using free advice now gives you more options than waiting until several winter bills have fallen overdue.

Frequently asked questions

What is the energy price cap?

The energy price cap limits the unit rates and standing charges suppliers can charge customers on default tariffs in Great Britain. It does not put a maximum limit on your total energy bill. What you actually pay still depends on how much gas and electricity you use.

Is £1,723 the maximum I can pay for energy?

No. £1,723 is an annualised illustration based on Ofgem's typical household energy use and average Direct Debit rates. You can pay more or less depending on your consumption, region, tariff and payment method.

What are the new energy price cap unit rates?

For a Direct Debit customer, Ofgem's average electricity unit rate from the 1st of October is 26.32p per kWh with a 54.83p daily standing charge. Gas averages 7.97p per kWh with a 29.68p daily standing charge. Your actual rates can differ by region.

Does the energy price cap affect fixed tariffs?

The price cap rise does not change the agreed rates on a fixed tariff. The removal of VAT from household electricity still applies to fixed-tariff customers. Your supplier should apply that tax reduction automatically.

Should I fix my energy tariff before winter?

A fixed tariff may cost less than the new price cap, but compare the unit rates, standing charges and exit fees against your own energy use. Fixing gives you price certainty, but variable rates could later fall below the rate you have locked in.

What should I do if I cannot afford my energy bill?

Contact your energy supplier as early as possible and explain what you can realistically afford. Suppliers must work with customers in payment difficulty and may offer a repayment plan, more time to pay or other support. Free debt advice is also available from organisations such as StepChange.

Does the electricity VAT cut apply automatically?

Yes. VAT on household electricity is being reduced from 5% to zero from the 1st of October, and you do not need to apply for it. The change also applies to fixed tariffs and prepayment electricity customers.