The energy price cap will rise by £63 in October, the third increase this year, pushing the typical household bill to over £1,800. That is the reality Ofgem is meant to manage. Now the government says it will give the regulator more power to protect consumers, a tacit admission that the existing framework has not worked.
As reported by Enerdata, the new powers include the ability to impose price caps on standing charges and intervene faster when suppliers collapse. But the detail matters, and for UK homeowners, the real question is whether this translates into lower bills or just slower rises.
What the new powers actually do
Ofgem will be able to set a maximum standing charge, which currently varies wildly by region, from 45p a day in London to 70p in some northern areas. That alone could save a typical household £90 a year. The regulator will also get a new ‘supplier of last resort’ mechanism that kicks in within 48 hours of a company failing, rather than the weeks it took during the 2021 crisis when Bulb and others collapsed, leaving 1.7 million customers in limbo.
But there is a catch. The government has not said when these powers take effect. Officials briefed that legislation will be introduced ‘when parliamentary time allows’, which could mean 2025 or later. Meanwhile, standing charges have already risen 30% since 2021, and the price cap is set to increase again in January.
What this means for your energy bills and EPC
The immediate impact on your household budget is zero. Ofgem’s new powers do not reduce wholesale gas prices, which still account for 60% of a typical bill. Nor do they fix the grid constraints that push up network charges. For a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity, the annual bill remains around £1,800 under the current cap.
Where the change matters is for homeowners planning eco upgrades. If Ofgem can cap standing charges, the payback period for solar panels or a heat pump improves slightly, because you save more on the variable unit rate once standing charges are fixed. The Energy Saving Trust calculates that a typical household saves £300–£600 a year with solar panels, but that figure assumes current standing charges. Lower standing charges would shave about 2% off the payback time, hardly transformative, but not nothing.
For EPC ratings, the new powers have no direct effect. Your home’s energy performance still depends on insulation, glazing, and heating system efficiency. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing.
Who qualifies, and who doesn’t
The new Ofgem powers apply to all households on standard variable tariffs, which covers 80% of UK homes. If you are on a fixed tariff, you are already protected by your contract terms, but those terms are likely to be higher than the cap anyway. The real losers are the 1.3 million households on prepayment meters, who still pay more on average than direct debit customers, despite a 2023 ban on forced installations.
Ofgem has promised to review prepayment pricing separately, but no date has been set. For now, if you are a prepayment customer, switching to a smart meter and paying by direct debit could save you £100–£150 a year, far more than any regulatory change will deliver in the near term.
What you should do now
Do not wait for Ofgem to ride to your rescue. The new powers are a welcome step, but they are a backstop, not a solution. Your best hedge against future bill rises is to reduce your energy demand. Start with a free home energy audit from your supplier, many now offer them under the Energy Company Obligation (ECO4) scheme. Then apply for insulation grants before the next price cap rise in January. If you are considering a heat pump, the Boiler Upgrade Scheme closes to new applicants on 31 March 2027, so act before then.
Households on standard variable tariffs can check their current standing charge on their bill, if it is above 55p a day for electricity or 28p for gas, you are paying more than the national average. Contact your supplier to ask why. Ofgem’s new powers may not be law yet, but you can start pushing for fairness today.
Frequently Asked Questions
No, the immediate impact on your household budget is zero. The new powers do not reduce wholesale gas prices, which account for 60% of a typical bill, and legislation may not take effect until 2025 or later. For a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity, the annual bill remains around £1,800 under the current cap.
Ofgem's new power to cap standing charges could save a typical household £90 a year. Currently, standing charges vary from 45p per day in London to 70p in some northern areas, and they have risen 30% since 2021.
The government has not specified a date, with officials stating legislation will be introduced 'when parliamentary time allows,' which could mean 2025 or later. Meanwhile, the price cap is set to rise by £63 in October and increase again in January.
No, the new powers have no direct effect on grants. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing.
The new rules apply to all 80% of UK homes on standard variable tariffs. If you are on a fixed tariff, you are protected by your contract terms, though they are likely higher than the cap. The 1.3 million households on prepayment meters are also covered under the cap.
