Ofgem’s 13% price cap rise: what it means for your home

Ofgem will raise the energy price cap by 13% from 1 October 2024, the third increase in twelve months. A typical household paying by direct debit will see annual bills climb to roughly £1,830, up from £1,650. That is £180 more a year, or £15 a month, for the same gas and electricity.

The decision, as reported by The Canary, reflects rising wholesale gas costs and increased network charges. But the headline number masks a harsher reality: the cap applies to unit rates and standing charges, not total bills. Households that use more energy, larger homes, older properties, families, will pay considerably more.

Who pays the most

The cap is calculated for a typical dual-fuel household using 12,000 kWh of gas and 2,900 kWh of electricity a year. A draughty Victorian terrace with a combi boiler and no loft insulation can easily burn 18,000 kWh of gas. That home’s annual bill will jump by more than £270 under the new cap. Ofgem’s own figures show that the poorest 20% of households spend about 10% of their income on energy, double the national average.

Standing charges, the fixed daily cost of being connected to the grid, are also rising. In some regions, the electricity standing charge will exceed 60p per day. That is roughly £220 a year before you switch a single light on. Energy Saving Trust data indicates that around 4 million UK homes still have uninsulated cavity walls, and 2.5 million lack adequate loft insulation.

What this does to your EPC

An Energy Performance Certificate rates homes from A to G. Running costs are a core component. A home with an EPC band D currently costs about £2,100 a year to heat and power. After this price rise, that same home will cost roughly £2,370, potentially pushing it into band E territory when the certificate is updated. For homeowners planning to sell or remortgage, a lower EPC rating can reduce property value by 5–10%, according to Nationwide research.

The catch is that most improvement measures, cavity wall insulation (£500–£1,500), loft insulation (£300–£600), a heat pump (£7,000–£13,000 after the Boiler Upgrade Scheme grant), take time to pay back. But with the price cap rising again, payback periods shorten. A 3-bed semi spending £1,830 a year on energy could cut its bill by 25–30% with solid wall insulation and an A-rated heat pump, saving roughly £500 annually.

What homeowners can do now

First, check your current tariff. If you are on a standard variable deal, you are paying the cap rate. Some fixed deals are now cheaper than the October cap, MoneySavingExpert reports fixes at 10–12% below the new cap. Switching now locks in lower rates for 12 months.

Second, apply for the Great British Insulation Scheme if your home has uninsulated cavity walls or a loft with less than 100mm of insulation. The scheme covers up to 100% of costs for eligible low-income households. For others, it offers subsidised rates through registered installers. The government’s own impact assessment suggests a typical 3-bed semi saves £200–£300 a year after full fabric upgrade.

Third, consider a heat pump. The Boiler Upgrade Scheme provides a £7,500 grant towards an air source heat pump. Installation costs have fallen by roughly 25% in the past two years, and running costs can be 15–20% lower than a gas boiler when paired with a good tariff (Economy 7 or a time-of-use rate). Heat pumps also improve EPC ratings by 1–2 bands because of their higher efficiency.

Fourth, install solar panels. A 4 kW system costs about £6,000 and generates roughly 3,500 kWh a year, enough to cover most of a typical home’s electricity. With the Smart Export Guarantee paying 15p per kWh exported, payback is now 8–12 years. Solar also lifts EPC scores by 1–2 bands.

Households on standard variable tariffs can apply for the Great British Insulation Scheme through gov.uk from 4 November 2024. The Boiler Upgrade Scheme runs until 31 March 2027. Act before winter: installers get booked up from October.