Millions of households in the UK are about to feel another squeeze on their budgets. From October, energy regulator Ofgem is raising the price cap by 2%—meaning

the “average” annual bill for gas and electricity will go up to about £1,755, an extra £35 compared with the last quarter.

Ofgem says the bump is mainly down to rising network and policy costs. While bills are lower than they were at the peak of the energy crisis in 2023, they’re still about 50% higher than before Russia’s invasion of Ukraine in 2021 sent global gas prices soaring.

The government has promised extra help this winter, extending the Warm Home Discount to cover 2.7 million more households—so around 6 million vulnerable households will get £150 off their bills. But Ofgem admits that expanding the scheme adds a little more (about £1.42 a month) to everyone else’s bills.

Consumer groups warn that energy costs remain “unmanageable” for many families and want more direct support. The government, on the other hand, says the real fix is moving away from gas and oil altogether. Energy Minister Michael Shanks put it bluntly: “The only way off the rollercoaster of fossil fuel prices is clean, homegrown power.”

Looking ahead, analysts say bills might come down in January if wholesale prices keep falling—but new policy costs, like funding the Sizewell C nuclear project, could keep prices higher than expected. Photo by Dara Jasumani, Wikimedia commons.