Winter energy prices in the UK are set to rise to their highest level in three years as volatility in international wholesale gas markets feeds into a new price cap, according to analysts cited by the BBC. The industry regulator Ofgem is expected to announce a 4% increase in the cap on Wednesday, affecting about 33 million households on variable tariffs in England, Scotland and Wales. The new cap will apply from October until the end of December.
Wholesale gas costs drive cap increase
Energy UK, the suppliers' trade body, reported the average price of gas has been 61% higher over the past three months compared to late 2025. The price cap reflects the rise in the wholesale cost of gas paid by suppliers, so the increase will hit bills just as colder weather arrives. The BBC noted that some households have moved onto fixed energy tariffs in response to the uncertainty created by the impact of the US-Israeli war with Iran. About 40% of billpayers now have fixed deals and will not see their prices rise until the end of their tariff terms.
Forecast and typical usage
Cornwall Insight, a consultancy, forecast that a household using a typical amount of gas and electricity paid by direct debit will pay £1,729 a year from October, up from £1,663 between July and September, which would be the highest for three years. Ofgem has reduced what it considers a "typical" level of energy use to 9,500 kWh of gas and 2,500 kWh of electricity a year, reflecting reduced consumption during high-price years and improved energy efficiency. The cap sets a maximum price per unit rather than a total bill, so actual household charges depend on usage.
Historical price cap levels for a typical household on a dual-fuel direct-debit tariff, as reported by the BBC:
| Period | Cap (£/year) |
|---|---|
| July 2024 | 1,685 |
| October 2024 | 1,846 |
| January 2025 | 1,869 |
| April 2025 | 1,992 |
| July 2025 | 1,854 |
| October 2025 | 1,892 |
| January 2026 | 1,758 |
| April 2026 | 1,641 |
| July 2026 | 1,663 |
| October 2026 (Cornwall Insight forecast) | 1,729 |
Note: The January 2023 cap was set at £4,414, but the Energy Price Guarantee limited typical bills to £2,500 between October 2022 and June 2023, according to the BBC chart data.
Debt and support measures
Households are paying hundreds of pounds a year more on average than before Russia's full-scale invasion of Ukraine in 2022 started the energy crisis, and industry data cited by the BBC shows bills have risen by about 70% compared with the pre-crisis norm. Unpaid bills have shot up, with Energy UK estimating total debt has risen to £6bn and expecting it to reach about £7bn by the end of the year. The average billpayer in debt without a payment plan owed £3,500, the trade body said. Energy UK has called for a flexible discounted tariff for those most in need, funded by taxation, and the government says VAT is being cut from electricity bills.
Without urgent intervention – namely a national social tariff and implementation of the long-awaited debt write off scheme from Ofgem – we expect this [debt] figure to rise in the coming months, and with that see an increase in the number of people coming to us for help with energy bills, said Emily Whitford, senior public policy advocate at StepChange.
Market outlook
The new price cap takes effect from October, and Ofgem's announcement on Wednesday will set the maximum per-unit charges for the October–December period. Energy UK reported a 61% increase in the average price of gas over the past three months compared to late 2025, and the BBC noted some households moved to fixed tariffs because of uncertainty from the US-Israeli war with Iran. Energy UK also expects consumer energy debt to rise to about £7bn by the end of the year.
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