The Energy Price Cap rises 13% next week, the third quarterly increase in a row. Ofgem will confirm the new level on 26 August, but Money Saving Expert has already warned subscribers that the typical household on direct debit will pay around £1,923 a year from 1 October. That is £180 more than the current cap, and £700 more than the pre-crisis average in 2021.
As reported by Money Saving Expert, the rise is driven by higher wholesale gas prices and increased network costs. But the headline number conceals a bigger truth for homeowners: the gap between efficient and inefficient homes is widening fast.
Who pays the most, and why
Ofgem’s own data shows that homes rated EPC D or below use about 30% more gas than those rated C or above. At the new cap, that gap is worth roughly £250–£400 a year. For a draughty 1930s semi with an EPC rating of E, the annual bill could hit £2,300. A modern flat rated B or above might pay £1,600. The cap is a ceiling on unit prices, not on total spend, so the worse your home holds heat, the more you lose.
The catch is that most government grants, the Boiler Upgrade Scheme, the Great British Insulation Scheme, still target the lowest-income households or specific measures. The median earner in a 3-bed semi often falls into the ‘able to pay’ category, with no direct subsidy for loft or cavity-wall insulation.
Three upgrades that still beat the cap
Even without grants, three measures offer payback within two years at the new price cap level.
Loft insulation (DIY, mineral wool, 270 mm depth) costs £300–£500. Energy Saving Trust estimates it saves £200–£300 a year in a gas-heated semi. Payback: 12–18 months.
Draught-proofing (doors, windows, letterbox, chimney balloon) costs £50–£150. Savings of £40–£80 a year, but more importantly it stops the ‘cold draught’ effect that makes people turn the thermostat up. Payback: under 12 months.
Smart heating controls (e.g., a Hive or Nest thermostat plus zone valves) cost £200–£400 installed. Savings of £60–£120 a year on gas. Payback: 2–3 years, but with the added benefit of remote scheduling and reduced boiler cycling.
What the EPC impact looks like
Each of those measures adds 5–10 points to a home’s SAP rating, which can lift a D to a C or a C to a B. That matters because from 2025, landlords cannot let properties below EPC C. For owner-occupiers, a higher EPC also increases resale value, estate agents typically price a B-rated home 5–8% higher than a D-rated equivalent, according to research by the Building Cost Information Service.
The cap rise shows energy efficiency is not an abstract ‘green’ goal. It is a direct hedge against price volatility. Households that lock in lower demand through insulation and controls will feel the £180 rise far less than those who do nothing.
What to do by 1 October: check your loft insulation depth (270 mm is the current recommendation), seal the biggest draughts (front door and letterbox are cheap wins), and set your heating programmer to match your actual occupancy. Those three steps cost under £200 and will save more than the cap rise in year one.
Frequently Asked Questions
Ofgem will announce the January cap on 26 November. Analysts at Cornwall Insight predict a further 3–5% rise, but the final figure depends on wholesale gas prices through autumn. Homeowners should assume rates stay elevated until at least spring 2025.
For those above that threshold, some energy suppliers still offer partial discounts through ECO Flex. Check with your supplier directly.
