Energy price cap to rise by 2% from October
Energy regulator Ofgem has announced a 2% rise of the energy price cap for the period between October to December 2025.
The price cap (the tariff you default to if you’re not on a fixed tariff) – which sets a maximum rate per unit and standing charge that can be billed to customers for their energy use – will rise by around £2.93 a month for the average household.
It means that from October to December, a typical household on a default tariff will pay £102 for what currently costs £100 per month.
Latest figures show more than a third of customers (37%) are now on fixed tariffs, which means they are protected from the upcoming rise. But the regulator continues to urge people to shop around and consider if a fixed tariff will work for them, as there are options on the market which will save money against the new price cap.
Tim Jarvis, Director General, Markets at Ofgem, said: “While there is still more to do, we are seeing signs of a healthier market.
“There are more people on fixed tariffs saving themselves money, switching is rising as options for consumers increase, and we’ve seen increases in customer satisfaction, alongside a reduction in complaints.
“While today’s change is below inflation, we know customers might not be feeling it in their pockets.
“There are things you can do though – consider a fixed tariff as this could save more than £200 against the new cap. Paying by direct debit or smart pay as you go could also save you money.
“In the longer term, we will continue to see fluctuations in our energy prices until we are insulated from volatile international gas markets. That’s why we continue to work with government and the sector to diversify our energy mix to reduce the reliance on markets we do not control.”
Ofgem has also introduced rules to ensure anyone struggling with their bills gets the help they need from their supplier. That could include tailored repayment plans, which can help households regain control and avoid falling further behind, or providing emergency credit to reduce the risk of self-disconnection.
Year on year when adjusted for inflation the cap is 0.9% lower than the same period in 2024.
For an average household paying by Direct Debit for gas and electricity, the overall bill will be £1,755 per year. This is £625 (26.3%) lower than the height of the energy crisis at the start of 2023 when the government implemented the energy price guarantee.
A small increase in both network and policy costs contribute to the £2.93 a month addition to the price cap from October to December. These costs ensure our network remains stable and secure; power reaches households and businesses; and helps people in fuel poverty get the essential support they need.
Check live fuel prices near you before you set off.
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