Winter energy prices expected to rise to three-year high

Energy bills for millions of households are expected to rise this winter to the highest level for three years, under a price cap to be announced by the industry regulator on Wednesday.

The cap will reflect the rise in the wholesale cost of gas, paid by suppliers and will hit bills just as the colder weather arrives in October until the end of December.

Analysts expect Ofgem to say prices will go up by 4% compared with the current cap, affecting those on variable tariffs in England, Scotland and Wales.

Firms say energy debt has jumped and, with high bills likely to persist, have called for more support for those struggling to pay. The government says VAT is being cut from electricity bills.

The price cap for about 33 million households is expected to rise, driven by volatility in international wholesale gas prices.

The average price of gas has been 61% higher over the past three months compared to late 2025, according to suppliers' trade body Energy UK.

Millions of people have moved on to fixed energy tariffs, some in response to the uncertainty created by the impact of the US-Israeli war with Iran.

Anyone on a fixed deal will not see the price they pay rise, until at least the end of the term of their tariff. About 40% of billpayers have fixed tariffs.

The energy cap sets a maximum price for each unit of gas and electricity, not the total bill, so a household's final bill depends on what they use.

In July, Ofgem reduced what it believes to be a "typical" level of energy use, because many homes have cut back owing to high prices of recent years while energy efficiency has improved.

Its new estimate is 9,500 kWh of gas and 2,500 kWh of electricity a year.

Cornwall Insight, the consultancy, has forecast that a household using a typical amount of gas and electricity, paid through direct debit, will pay £1,729 a year from October.

This is up from £1,663 between July and September and woild be the highest for three years.

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