The UK's energy regulatory body, Ofgem, has announced that the energy price cap will increase by 2% from 1st October 2025. This means that the typical annual household dual-fuel energy bill will rise from £1,720 to £1,755, an annual increase of around £35 for the average household.
While the unit price for electricity per kWh has gone up, the unit price per kWh for gas has actually gone down. It is an increase in the daily standing charges that have contributed most, with a 14% rise in the daily standing charge for gas and 4% rise in the standing charge for electricity. The significant increases to standing charges have upset campaigners, with many branding it a 'hidden cost'.
Tim Jarvis, Director General of Markets at Ofgem, said "While today’s change is below inflation, we know customers might not be feeling it in their pockets".
"In the longer term, we will continue to see fluctuations in our energy prices until we are insulated from volatile international gas markets. That’s why we continue to work with the government and the sector to diversify our energy mix to reduce the reliance on markets we do not control".
What is the energy price cap?
The energy price cap was introduced by Ofgem to control the maximum amount that energy providers are allowed to charge consumers for each unit of gas and electricity. Ofgem calculates the price cap every three months and takes into account the cost of VAT, wholesale energy prices and the cost to provide energy. It then generates an annual figure based on the average dual-fuel household that pays via direct debit.
The energy price cap is based on the average dual-fuel household bill and how much you will actually pay will vary depending on how much energy you use.
Energy price cap figures - 2024/25
Below, we provide a brief history of the energy price cap figures going back to January 2024.
| Date Energy Price Cap is effective from | Energy Price Cap |
| 1st January 2024 | £1,928 |
| 1st April 2024 | £1,690 |
| 1st July 2024 | £1,568 |
| 1st October 2024 | £1,717 |
| 1st January 2025 | £1,738 |
| 1st April 2025 | £1,849 |
| 1st July 2025 | £1,720 |
| 1st October 2025 | £1,755 |
Energy price cap history
The graph below shows the fluctuations in the energy price cap since January 2024 and also provides the latest prediction for the energy price cap for January 2026.
How much will I pay for energy under the new price cap?
The following table shows how much you can expect to pay for each unit of gas and electricity from 1st October 2025. The figures will vary depending on where you live in the UK. Remember, the amount you pay under the new price cap will be based on your energy usage and the charges stated below, assuming you pay by direct debit.
The latest Energy Price Cap figures include a significant rise in the daily standing charge in what campaigners are calling a 'hidden cost'. October's Energy Price Cap figures include a 4% rise in the daily standing charge for electricity and a 14% increase for gas. These increases have been applied to offset the cost of the Warm Home Discount scheme and to cover increased network charges.
| Current energy price per unit
(1st July - 30th September 2025) |
New energy price per unit
(1st October - 31st December 2025) |
|
| Electricity | Daily Standing charge: 51.37p
Unit price per kWh: 25.73p |
Daily Standing charge: 53.68p
Unit price per kWh: 26.35p |
| Gas | Daily Standing charge: 29.82p
Unit price per kWh: 6.33p |
Daily Standing charge: 34.03p
Unit price per kWh: 6.29p |
(Source: Ofgem)
What will happen to the energy price cap in the future?
Major energy suppliers now provide energy price cap forecasts that stretch as far as the autumn of 2026. Current long-range forecasts from major suppliers suggest relative stability or minor fluctuations after the July drop, but with a high degree of caution. The low confidence ratings attached to these predictions underscore the ongoing volatility in global energy markets. Geopolitical tensions, unexpected weather patterns, or changes in global supply and demand can rapidly alter wholesale prices, making long-term forecasting extremely challenging.
| Source | Predicted Annual Cost (£) from January 2026 | Confidence Level (where stated) | Date of Forecast |
| British Gas | £1,695 | Very Low | 19 August 2025 |
| E.ON Next | £1,694 | Very Low | 27 August 2025 |
| EDF | £1,747 | N/A | 27 August 2025 |
Is now a good time to switch to a fixed energy tariff?
You need to consider what is important to you. The energy price cap changes every 3 months, while fixed deals typically last 12 or 24 months. There is a danger that should you fix, a better deal may be just around the corner. The real benefit to fixing your energy deal is the assurance that you know exactly what you will be paying for your energy over a set period. While better deals could come to market during your fixed period, you are protected should there be a sudden surge in energy prices.
When discussing the latest Ofgem energy price cap figures for October, Tim Jarvis, Director General of Markets at Ofgem, stated that "While there is still more to do, we are seeing signs of a healthier market. There are more people on fixed tariffs saving themselves money, switching is rising as options for consumers increase, and we’ve seen increases in customer satisfaction, alongside a reduction in complaints."
"There are things you can do though - consider a fixed tariff as this could save more than £200 against the new cap. Paying by direct debit or smart pay as you go could also save you money".
Looking at the best fixed-rate deals on the market right now, you could make a saving of around 20% when compared to the current energy price cap figures (£1,720 - July to October 2025). We provide a roundup of the best fixed-rate tariffs on the market in our article 'What is the cheapest fixed price energy tariff? - Best deals compared'.
What to do if you're struggling to afford your energy bills
Your energy supplier may be able to help you arrange an affordable repayment plan if the cost of energy is becoming overwhelming, so it is best to contact them as soon as possible. We provide some tips if you are struggling to afford your energy bills in our article 'How to save money on your energy bills'.
There are also a number of grants and schemes available for those who are most vulnerable. More information and help on the cost of living can be found in our Cost of Living guide.
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