Energy prices are set to rise by 13% from October, adding roughly £250 to the average household’s annual bill. The increase, reported by Sky News, is the third increase this year and comes as the energy regulator’s chief warns of a prolonged period of high prices.
What the 13% rise means for your bills
The price cap will rise from £1,928 to £2,178 a year for a typical dual-fuel household paying by direct debit, according to figures seen by Sky News. That’s an increase of £250 a year, or about £21 a month. For a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity a year, the actual figure will be closer to £2,400, depending on your region and tariff.
The rise is driven by higher wholesale gas prices, increased network charges, and the cost of government schemes like the renewable obligation. Ofgem confirmed the figure to Sky News, noting that the cap is calculated every three months based on wholesale costs.
Ofgem’s warning: ‘a prolonged period’ of high prices
In a separate statement, the chief executive of Ofgem told Sky News that the regulator expects high prices to persist for at least the next two to three years. The warning points to continued volatility in global gas markets, compounded by geopolitical uncertainty and limited LNG supply.
The catch is that the price cap is built to protect consumers from extreme spikes, but it also means households face a slow bleed of rising costs rather than sudden shocks. Ofgem’s chief said the regulator is exploring ways to smooth the impact, but no concrete measures have been announced.
What this means for homeowners, and how to fight back
For UK homeowners, the 13% rise is a clear signal to act. Every £250 extra on energy bills is £250 that could be saved through home upgrades. The average 3-bed semi in the UK loses 35% of its heat through walls and windows, according to data from the Energy Saving Trust. Insulating cavity walls and loft spaces can cut heating costs by up to 25%, saving around £300 a year at current prices.
The Boiler Upgrade Scheme offers £7,500 towards a heat pump, which can cut heating bills by 30-50% compared to a gas boiler, depending on your property’s insulation. The ECO4 scheme, funded by energy suppliers, covers full insulation and heating upgrades for low-income households. For those not eligible, the Great British Insulation Scheme offers discounted loft and cavity wall insulation.
Solar panels are another option. A typical 4kWp system costs around £6,000 and can cut electricity bills by 40-60%, saving £300-£500 a year. With the Smart Export Guarantee paying for surplus power, payback periods are now around 8-12 years.
EPC band D or E homes face the biggest bills. Upgrading to band C could save £400-£600 a year, and from 2028, landlords will be required to meet EPC band C for new tenancies. Homeowners should check their EPC rating and prioritise the cheapest measures first, draught-proofing, loft insulation, and smart thermostats.
Next steps for readers
Households on standard variable tariffs should check if they can fix a lower rate. Some fixed deals are still available at 5-10% below the cap. Apply for the Boiler Upgrade Scheme through gov.uk from 1 April 2025, the grant is available for heat pumps and biomass boilers. Check eligibility for ECO4 if your household income is below £31,000 or you receive certain benefits.
For a personalised plan, contact an MCS-certified installer for a free survey. The Energy Saving Trust’s home energy check tool is a good starting point. The next price cap review is in October 2026, so acting now locks in savings before the next rise.
Frequently Asked Questions
The price cap will rise by 13%, adding about £250 a year to the average household bill. For a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity, the increase will be closer to £300, depending on your region and tariff.
The Boiler Upgrade Scheme offers £7,500 for heat pumps. ECO4 covers full insulation and heating for low-income households. The Great British Insulation Scheme offers discounted loft and cavity wall insulation. Check eligibility on gov.uk.
Ofgem's chief has warned of a prolonged period of high prices, likely lasting two to three years, due to global gas market volatility. This makes home efficiency upgrades a smart long-term investment.
