Most people will pay more for energy from October

From October, electricity rates will rise from 26.11p a kilowatt hour to 26.32p, and gas charges will rise from 7.33p to 7.97p for households on a price-cap tariff that pay by direct debit.

Don’t be fooled by the fact Ofgem’s estimate for a typical annual bill has fallen from £1,862 to £1,723 – this is purely down to the assumption that households will use less energy than before. Under the old methodology, the same underlying costs would have produced a typical bill of around £1,935 – meaning a rise of £73 a year from current prices. The new methodology suggests a slightly smaller annual increase of £60.

This relatively modest increase would have been steeper had it not been for Andy Burnham’s decision to axe the 5% VAT on electricity bills from the same date – a move expected to save the average household about £45 annually.

What is the energy price cap?

The energy price cap limits how much suppliers can charge per unit of gas and electricity. 

But it doesn’t cap your total bill - the amount you pay depends on how much energy you use.

The price cap applies to households on standard variable tariffs, which are the default tariffs for customers who haven’t switched to a fixed-rate deal. 

How do I know if I’m on a price-capped tariff?

If you fall into any of these groups, chances are your bills will be governed by the price cap:

• You've never switched your energy deals. 
• You were on a fixed deal that has come to an end and you haven’t switched again. 
• You've been placed on a default tariff after moving home. 
• You’ve been placed on a default tariff by your new energy provider after your existing supplier went bust. 

What can I do if I’m already struggling?

Although October’s price rise isn’t huge, that’s probably of little comfort if you’re already struggling.

To help you prepare, you can get a personalised estimate of how much your bill is likely to increase by using household bills calculator. Just enter your current monthly bill in the energy section and it’ll give you a tailored estimate to help you plan ahead. Once you have a more accurate idea of how much your bill is set to rise by, you can work out your next steps.

Speak to your energy supplier

If you’re already behind with your energy bill or worried you could end up falling behind when prices go up, speak to your provider.

They might be able to offer:

• grants
• payment plans
• advice on managing your account

Check you’re not missing out on benefits

Use our benefits calculator to find out what financial support you could be entitled to.

Or you can give us a call and we’ll look into what you could claim. You could be missing out even if you’re working full time.

Speak to us

If you’re struggling to pay back money you owe, we can run through your budget and work out what options you have. You might be surprised at the range of help available.

Reduce your energy use

Making lots of small changes like only using your washing machine when you’ve got a full load, turning lights off in empty rooms and taking shorter showers can end up making a big difference to your bills over time.

We’ve put together a list of 50 smart energy-saving tips to help you get started.

Get on top of your budget

Energy is just one essential cost that comes with running a household.

So make sure you know exactly how much money you’ve got coming in each month and where it’s going, so you can prioritise your spending and identify possible savings.

Check our guide to creating a budget to find out more.

More help

You’ll find lots of other tips and advice on saving money on the energy hub on our website.