Tag: Ofgem Price Cap

Energy bills to rise by 13.5% as households warned of difficult times ahead

Average household energy bills will rise by £221 from 1 July, a 13.5% increase on the previous quarter and 79% higher than before the energy crisis began in winter 2020/21, according to figures confirmed by Ofgem.

The increase is driven primarily by the cost of gas, with unit rates up 28% on the last quarter and 16% higher than a year ago, a direct consequence of the so-called “Trump Tax” and disruption to global energy markets following the US-Israeli conflict with Iran.

Electricity unit costs are broadly unchanged.

The End Fuel Poverty Coalition has warned that households cannot afford a summer of suspense while Ministers finalise their plans for winter support.

With the consumption levels used by Ofgem to calculate the typical household changing, it will be important to focus more on unit costs and standing charges in future updates.

Simon Francis, coordinator of the End Fuel Poverty Coalition said:

“Behind every energy price rise are households whose direct debits are about to rise, families whose energy debt is harder to clear, and pensioners whose summer is already overshadowed by the winter ahead. Meanwhile, the energy industry has posted more than £3 billion in profits from its UK operations in the first three months of 2026.

“With energy costs rising over the summer, any chance households had to reduce energy debts or build up reserves before the winter heating season will be wiped out.

“We are also worried that energy firms will now factor higher costs into direct debit calculations, meaning many households will feel the financial impact of winter long before October.

“That concern is sharpened by forecasts suggesting the October cap could remain at a similar level, leaving millions of households facing an extremely difficult year ahead if nothing changes.

“This summer will also bring its own pressures.

“With the vast majority of existing homes at risk of overheating in extreme heat events, and the poorest neighbourhoods seven times more likely to be vulnerable, households will need to run fans and cooling equipment exactly when their bills are rising.

“The Government cannot wait until September to act. It must confirm what support will be available, address the fact that relying on gas for heating is a dead end as the North Sea runs dry and chart a path for households to find a permanent way off the gas price rollercoaster.”

Joanna Elson, CBE, Independent Age chief executive, commented:

“Today’s energy price cap announcement will be devastating for the older people in financial hardship we support.

“In an increasingly volatile world and with prices rising across many everyday essentials, people on low incomes need long-term protection from future spikes in energy costs. The recent extension of the Warm Home Discount is welcome, but as soaring bills continue to stretch budgets, the support should be increased from £150 to £400 to match the high cost of energy and lift people out of fuel poverty.

“Introducing a more comprehensive energy social tariff would lower bills further for customers in financial hardship, helping them keep their homes warm during the coldest months. If the UK Government is serious about tackling the high cost of living it must take quick and meaningful action so no older person is left in the cold this winter.”

Elsa Person, Head of Public Affairs England at Marie Curie, said:

“A terminal diagnosis often brings with it increased costs towards the end of life, as bills go up to pay to keep essential medical equipment running. As a result, over 120,000 people die in fuel poverty every year in the UK. As energy bills rise, we fear this number will only increase.

“No one should spend their final months worrying about whether they can afford to run vital equipment. As costs continue to increase, Marie Curie is calling on the UK government to provide the necessary financial support terminally ill people need to manage their bills by introducing a social tariff for energy that this group can access.”

Uplift Deputy Director Robert Palmer added:

“People are fed up with an energy system that sees oil and gas companies rake in billions in profits, while the rest of us a saddled with higher bills.

“This is not the first time we have seen the gas price soar off the back of conflict and it won’t be the last. While we remain dependent on gas, a handful of oil giants will continue to get rich at our expense.

“More North Sea drilling will do absolutely nothing to lower energy bills and only make a minimal difference to energy security. After 50 years of drilling, we have burnt most of the UK’s gas reserves.

“Politicians need to learn the lesson of the last five years – that the only way to insulate ourselves from these risks is by doubling down on renewables and helping more households and businesses make the switch to clean electricity. This is just common sense in today’s world.”

Even the industry body, Energy UK, told the Press Association:

“A rise of this scale will already be a concern for millions of customers but such worries will be magnified if bills remain at this level – or higher – over the winter months.

“So the Government must now focus on how it can best target support later in the year to those customers most in need – in addition to the help suppliers already offer.

“It’s another unwelcome reminder – coming too soon after the last one – of how our country’s high dependence on gas leaves us exposed to price spikes we can do nothing about resulting from conflicts thousands of miles away.”

Cheaper biscuits, free bus rides, but nothing on energy bills

The Chancellor has set out a package of cost-of-living measures, including free bus travel for children in England during August and cuts to import tariffs on more than 100 food products, expected to save consumers around £150 million a year.

But the announcement contained nothing on energy bills, as Rachel Reeves sought to reassure households by comparing July’s expected bills to April last year, obscuring the fact that forecasts point to a £209 rise on current bills and that gas unit rates are set to climb 25% on current prices.

A spokesperson for the End Fuel Poverty Coalition, commented:

“The Chancellor’s complacency on energy bills is shocking.

“Ministers say they are waiting until they finalise winter support. But that ignores the majority of households who pay on direct debit and could see energy firms increase their payments to take into account of likely higher costs this winter.

“Keeping people waiting for help will also be too late for households already in debt and dreading the next bill or people who rely on energy for medical or disability needs.

“The Government must confirm what energy support will be available now, including for those in energy debt, and those not covered by the price cap, such as households relying on heating oil and those on heat networks.

“The Chancellor also appears not to have set out a long-term plan to cut bills, such as breaking the link between electricity prices and volatile gas markets, or accelerating the shift to homegrown renewables.”

Forecast shows a hard winter on the horizon after July price cap rise

Energy bills are now forecast to rise by £209 to £1,850 from July, a 13% increase on the current £1,641 cap, according to Cornwall Insight.

The analysts confirm that main driver is rising wholesale prices following US and Israeli missile strikes on Iran, damage to Gulf energy infrastructure, and the closure of the Strait of Hormuz.

The costs represent an 8% year-on-year increase, but October is now also being flagged by experts as an even greater concern, with current forecasts pointing to a similar cap level.

Despite recent moves by the Government to bring down the cost of energy, compared to winter 2020/21, the forecast represents an average energy bill that is £808 higher than before the Russian invasion of Ukraine.

Ofgem will make its final announcement of energy costs on 27 May.

A spokesperson for the End Fuel Poverty Coalition commented:

“Energy companies have made more than £3 billion in profits in the last three months on their UK operations and energy bills are now set to rise.

“Households are being asked to absorb an increase driven entirely by conflict and instability in the Middle East, while the industry that profits from the volatile gas market continues to cash in.

“We are also now able to see the clear danger that will come in October if the cap stays at a similar level. If bills remain high when heating season begins, millions of households already in energy debt or struggling to keep their homes warm will face an extremely difficult winter.

“Households need reassurance and support, not a summer of suspense. That means the Government must act before winter to spell out what support will be available.”

“The only lasting answer to the seemingly permanent energy bills crisis is to reduce our dependence on gas and the volatile markets that drive our energy bills. That means boosting energy efficiency and renewables and every year we delay that transition is another year households pay the price.”

Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said:

“Short-term support can protect the most vulnerable households, but it won’t address the underlying problem.

“While Government’s plans, such as proposals to decouple electricity prices from gas, are well-intentioned, and in time they could make a small difference, gas is still likely to set the price the majority of the time, so consumers won’t feel a substantial change.

“Building out our renewable capacity is the only real path to bills that aren’t as exposed to events thousands of miles away. It won’t be cheap, and bills will not see an immediate drop, but that is the direction of travel if we want genuine, lasting stability.”

Energy bills announcement on 27 May as PM faces leadership challenge

On 27 May, Ofgem will announce the new energy price cap, and households will learn what their energy bills will cost them this summer.

For the millions of households living in fuel poverty and for those already in energy debt, this will be a question of whether they can afford to keep the lights on.

Yet at the moment this announcement approaches, political turbulence at Westminster is dominating the news, with ministers and MPs focused on questions of leadership rather than the cost of energy crisis.

A spokesperson for the End Fuel Poverty Coalition commented:
“In just 15 days, Ofgem will announce the new energy price cap and households will learn how much their energy bills will increase.

“The Government should be working flat out on a package of support for vulnerable households and those in energy debt now, while urgently reforming electricity prices to bring down costs for everyone.

“Energy bills were the number one cost of living concern for voters at the last elections. All MPs and Ministers should be focussed on addressing the challenges constituents face rather than internal party politics and the Westminster bubble.”

Energy bills due to increase 12% from 1 July

Energy bills are now expected to increase by £196 a year from 1st July.

While the new analyst projections are not as high as first feared, oil and gas wholesale markets remain volatile and households will face steep rises in their bills.

Cornwall Insight said its prediction for Ofgem’s cap from July to September now stands at £1,837 for a typical dual fuel household, an increase of 12% on April’s cap. In April, energy bills fell due to measures taken by the Government in the 2024 Budget.

Meanwhile, around 24 million people are worried about their ability to pay their energy bill over the next six months according to debt charity StepChange as it called for an energy social tariff to help struggling households.

A spokesperson for the End Fuel Poverty Coalition, said:
“The damage from the latest oil and gas price crisis is already baked into price cap predictions. Millions of households in fuel poverty are going to be asked to find more money for energy on top of prices that are already unaffordable.

“Fossil fuel wholesale markets remain volatile, global events continue to dictate what we pay for energy and families already struggling with energy debt have no buffer left to absorb further rises.

“A smaller than planned increase is not relief. It is still an increase that will push more people into crisis and generate higher profits for the oil and gas industry.

“The Government must set out what help is going to be available for households both in the short and long term.”

Two-thirds of households fear for finances as energy bills set to rise

Research carried out for Lightning Reach, has found households suffering widespread financial anxiety, with two-thirds concerned about their finances over the coming months.

Nearly two-fifths said their financial situation had worsened compared with the same point last year. Three in ten had cut back on essentials including food and heating, while a quarter had used savings to cover everyday costs and one in six had borrowed from family or friends.

More than half of those surveyed said they were carrying debt, with 42% reporting that their debt had increased. Global instability has contributed to rising prices and higher mortgage rates, adding further strain to household budgets.

Despite the scale of financial difficulty, a quarter of people said they would not feel comfortable requesting financial support even if their situation required it.​​​​​​​​​​​​​​​​

Meanwhile, energy giant BP has said that it is now set for “exceptional” financial results in the first three months of the year after the Iran war sent the cost of oil soaring.

A spokesperson for the End Fuel Poverty Coalition, commented:
“These figures reflect what households across the country are living through. Cutting back on food and heating is not an abstract financial decision, it is a sign that the energy system based on volatile oil and gas prices is failing people.

“With forecasts pointing to a fresh energy bill rise from July, the pressure on household budgets is only going to intensify. The Government must use the next price cap period as a moment to act. Targeted bill support, action on energy debt and reform of how energy costs are structured would make a real and immediate difference to millions of households.

“And with the public backing the continuation of the Windfall Tax on energy firm profits by a margin of two-to-one, there is also a clear way to pay for this support.”

Households face summer price shock as energy cap forecast to rise

Household energy bills are now almost certain to increase from July as soaring gas wholesale costs are due to push up the Ofgem price cap.

Cornwall Insight said its prediction for the watchdog’s price cap from July to September now stands at £1,929 for a typical dual fuel household. This represents a rate £887 above winter 2020/21 and 23% higher than at the last general election.

But the new analysis marks a slight fall from forecasts earlier this month.

A spokesperson for the End Fuel Poverty Coalition commented:
“Households are staring at another energy bill shock after a brief fall in prices from 1 April to 30 June.

“This represents a £288 ‘Trump Tax’ added to energy bills because of the impact of the conflict in the Middle East on oil and gas prices.

“For the millions of households already in energy debt, this will be a real worry and risks pushing more people into crisis.

“Ministers must prepare to use increased Windfall Tax receipts to act. That means targeted support for households hit first and hardest, including those off the gas grid and on heat networks, alongside faster action on energy debt and preparations to bring down costs if prices spike further.

“But we cannot keep letting history repeat itself. The only way to break this cycle is to ramp up energy efficiency, roll out homegrown renewables and fix electricity pricing so households see the benefit of cheaper clean power.”

Energy bills set to rise again in summer as global gas tensions bite

As conflict in the Middle East continues and Qatari production of LNG gas unlikely to restart soon, analysts at Cornwall Insight expects that energy bills will increase from 1 July by 10% to around £1,800 for the average household.

Members of the End Fuel Poverty Coalition predict that this will be at the lower end of predictions, if the conflict is not resolved in the coming days. After falling back from early morning extreme highs during trading yesterday, gas prices are sitting 26% up year-on-year (as at 0930 5 March).

A spokesperson for the End Fuel Poverty Coalition commented:

“The latest projections are devastating for households who had been expecting some relief on energy bills.

“Summer normally brings some respite for households because wholesale prices tend to ease as heating demand falls. So the prospect of bills rising by around 10% in July is a worrying sign that global tensions are once again feeding directly into energy costs.

“If these forecasts prove correct, the increase would wipe out the savings delivered by the Budget and pile even more pressure onto families already struggling. Energy debt is already at record levels, and millions of people remain in cold, damp homes after years of high bills.

“The deeper problem is that the UK is still dangerously exposed to volatile fossil fuel markets. As long as our energy system remains tied to global gas prices, shocks like this will continue to hit household finances.

“At the same time the energy industry stands to benefit from the crisis. It’s obscene that as bumper profits are predicted from the fresh energy crisis, some are calling for an early end to the Windfall Tax.

“Ministers must ensure the system works for consumers, not just for the fossil fuel giants, and deliver more homegrown renewables, better insulated homes and fairer energy pricing.”

Iran conflict pushes gas prices higher, but the risk for bills lies ahead

Gas wholesale prices have now hit levels not seen since 2023 (as at 09:00 3 March 2026 they were at levels last seen on 30 January 2023, up 36% year-on-year) and the cost of heating oil is also surging (up 39% year on year).

A spokesperson for the End Fuel Poverty Coalition, said:

“Global price shocks translate into higher energy costs because the UK remains so heavily dependent on gas and the mature North Sea basin will be unable to meet domestic demand within the next few years. Our energy system also links the cost of gas to electricity prices because the grid still relies on gas-fired power stations, although this influence eased last year.

“The conflict has already started to push wholesale gas prices to levels we’ve not seen since 2023, but for now most households are shielded by the Ofgem price cap.

“Bills are effectively protected until at least 1 July 2026 because the April to June cap has already been set. The cap works by smoothing out price spikes and delaying the passing on of cost increases to consumers. But that also means the real risk is what happens next.

“If wholesale prices fall back, the impact may be limited. But if elevated prices persist, they will affect Ofgem’s next price cap decision in May, which takes effect from July.

“It is also unclear how suppliers will respond in the fixed tariff market. In periods of uncertainty they often withdraw or increase the price of deals to avoid exposure to volatile wholesale costs.

“Households that rely on heating oil are even more exposed, and the latest surge in those prices will be a major concern for rural and off-grid families needing to refill in the coming weeks.

“This is a stark reminder that the UK is still dangerously exposed to volatile international markets. The only lasting protection for households is to cut gas demand through a nationwide insulation programme, expand homegrown renewables and reform energy pricing so bills are no longer tied so closely to global fossil fuel prices.”

Energy bills set to fall 7% from 1 April under Ofgem price cap

Ofgem has announced that the average household energy bill will fall by 7% from 1 April 2026.
The impact of the year-on-year changes could see the number of households paying more than 10% of their income on energy fall from 13.2m to 11.2m.
However, the changes will see energy bills remain £599 (57%) above winter 2020/21 and £73 (5%) above what they were on 1 July 2024.
Significant changes to unit costs and standing charges will take effect from 1 April 2026 and initial analysis suggests some households will see much bigger reductions than others.
A low usage household will see their bill reduce by around £80, while high usage households might see a £140 saving.
Using data from Scope and Mencap, the End Fuel Poverty Coalition has calculated that those reliant on energy for disability or health needs could see even greater savings, but will still experience a 64% ‘energy poverty premium’ with a typical bill much higher for these groups.
It remains unclear when and how energy firms will start to reflect these changes in the rates they advertise. The Government is expected to make a further announcement next month.
Simon Francis, coordinator of the End Fuel Poverty Coalition, said:
“Government decisions are starting to make a difference and today’s fall in the price cap will bring some welcome relief to households who have been under intense pressure from high energy costs.
“But, of course, bills remain hundreds of pounds above pre-crisis levels and for millions of families in cold, damp homes this will not feel like the cost of living crisis is over. If the country is going to tackle energy affordability for good, this must be the start of deeper reform, not the end of the job.
“That means bearing down on excessive market trading costs, dealing with the growing mountain of energy debt, taking a hard look at how infrastructure costs are recovered from households and doing more work to reduce exposure to volatile gas prices.
“At the same time, the energy industry and its ultimate owners, including hedge funds and overseas investors, must continue to face scrutiny for the healthy profits made at the expense of households
“With the changes to both unit rates and standing charges still working through the system, consumers may need to be cautious about rushing into fixed deals right now. Bill payers may want to wait for the dust to settle and carefully check their specific usage to ensure any switch delivers the maximum savings.”
Hannah Wall, Community Heat & Energy Lead at climate charity Possible, said:
“Lowering the energy price cap by removing levies from customers’ bills is a welcome step forwards to support people who have been struggling with high bills. But far too many people are still living in energy poverty, and face impossible choices to keep their homes warm.
“Energy bills remain significantly higher than they were before the energy crisis, driven by soaring gas costs. The structure of our energy system still leaves us exposed to volatile fossil fuel prices. It’s unfair that our electricity bills continue to be tied to global gas markets, creating a distortion that makes it harder for people to switch to clean electric heating, which should be cheaper than dirty gas.
“We need faster action from the government to deliver promised reforms to the electricity market to ensure everyone can afford a warm home powered by clean, climate-friendly heat and energy.”
Independent Age chief executive Joanna Elson, CBE, said:
“Today’s energy price cap announcement will provide some brief respite for the older people in financial hardship, as a typical household energy bill is dropping by almost seven per cent to £1,641 from April.
“However, energy bills are still extremely high, and the older people on low incomes we support are seeing their budgets stretched beyond breaking point.
“This winter has been brutal, we have heard dreadful accounts of people in later life sitting in cold, dark homes, or cutting back on other essentials such as food so they can turn a radiator on.
“This poses a health risk to older adults and cannot be allowed to continue happening.
“There are immediate and long-term actions the UK Government can take to support people on low incomes who cannot afford to heat their homes.
“The recent Warm Home Discount extension was welcome, but at £150, it does not go far enough in supporting those in financial hardship.
“We want to see it increased to £400 to match the high cost of energy bills.
“Targeted bill support is also needed in the form of an energy social tariff that protects customers on low incomes from future spikes in costs.
“If the UK Government is serious about tackling the cost of living and raising living standards, it should take meaningful action to lift people out of fuel poverty.”
Jonathan Bean from Fuel Poverty Action, commented:
“Customers should not be fooled: energy bills are still £600 higher than 5 years ago, meaning the suffering will continue for millions of us.
“Up to £500 of our bills is energy firm profits which means that Ofgem and the Government are failing to protect us.
“We especially need a fairer deal on electricity pricing which is four times higher than gas, despite wind and solar energy being cheaper.”
James Taylor, director of strategy at Scope, added:
“Life costs a lot more if you’re disabled. The need to run lifesaving equipment or keep the heating on year-round means bills continue to be steep.
“We’re calling on Ofgem to do much more to protect disabled customers, and for the government to introduce a discounted energy deal for disabled people.”
Uplift Deputy Director Robert Palmer said:

“This is welcome news for millions of households as it shows the UK is starting to turn a corner on energy bills.

“Weaning ourselves off volatile gas is the only real long term route to affordable energy bills and last year we generated record-breaking amounts of renewable energy, with wind power cutting the wholesale cost of electricity by almost a third.
“Compare this to America where Donald Trump is blocking renewable energy and doubling down on fossil fuels, and electricity bills are rising.
“Today’s Price Cap shows we’re on the right path. It’s not just our bills that are benefitting from more renewables, our planet will too. This is a change that cannot come soon enough as already we’re seeing the impacts of climate change caused by our oil and gas dependency and the costs it imposes on everyone, whether that’s flooded homes and businesses or rising food prices.”