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OFGEM has today announced a rise in the energy price cap, increasing average energy from October 1st[1].

Read on to find out what’s changing, how it might affect your energy costs and what support’s available if you’re struggling to keep up with bills.

What is the energy price cap?

The energy price cap is a limit set by OFGEM on what suppliers can charge you for each unit of gas and electricity, as well as the daily standing charge. It applies to around two thirds of households in the UK, including those who are on standard variable tariffs, and including those who pay by:

  • Standard Credit, which is a payment made when you get your energy bill.
  • Direct Debit
  • Prepayment meter
  • Economy 7 (E7) Meter, which charges different rates for day and night usage.

It’s designed so that prices closely reflect the actual cost of supplying energy and it’s decided by what OFGEM considers typical energy use for the average UK household.

This means your bill might be either higher or lower depending on your household’s actual energy use.

OFGEM reviews the cap every three months, so it can rise or fall throughout the year, depending on changes in the wholesale energy market.

What’s the current energy price cap?

From 1 July to 30 September 2025, the energy price cap is set at £1,720 per year for a typical household on a dual fuel tariff (using both electricity and gas) and paying by Direct Debit.

Currently, average unit rates and standing charges are:

  • Electricity: 25.73p per kWh, with a daily standing charge of 51.37p
  • Gas: 6.33p per kWh, with a daily standing charge of 29.82p

What’s the new energy price cap?

From the 1st of October to the 31st of December 2025, OFGEM has announced today that the cap will increase to £1,755 per year, a 2% increase from the current level.

This means the new unit rates and standing charges from July to September will be:

New cap (October to December 2025):

  • Electricity: 26.35p per kWh, 53.68p daily standing charge
  • Gas: 6.29p per kWh, 34.03p daily standing charge

This means many households should see an increase in their energy bills over the upcoming winter months. It’s important to remember that how much your bills will rise will depend on your usage.

How might the new cap affect me?

While it’s important to remember that your overall costs may still depend on energy usage, higher unit rates and standing charges could mean higher bills for many households.

It’s important to remember the context of the current energy market:

  • The new cap is £625 (26.3%) lower than at the peak of the energy crisis at the start of 2023.
  • But the new cap is still 2.2% higher than the same period last year[2].

When is the next energy price cap review? 

OFGEM review and set a level on how much an energy supplier can charge for each unit of energy including the standing charge every three months. The levels for the period 1 January 2026 to 31 March 2026 will be published by 25 November 2025.

Can I ‘beat the energy price cap’?

Some fixed tariffs now available are up to 15% lower than the upcoming cap. For most, it’s a good idea to fix your tariff on the current lower rates, although you need to be aware of exit fees with your current provider.

Fixing your tariff means locking in your unit rates and standing charges for a set period. This is usually for 12, 24 or even 36 months, which can help protect you from future price rises and make your bills more predictable.

If you’re thinking about switching to a fixed deal, it’s important to take your time to compare options carefully. Make sure the tariff suits your needs and check for any exit fees or contract terms.

Can I get help with the cost of my energy bills?

It’s important to remember that if you’re on means-tested benefits, you’ll automatically be entitled to the Warm Home Discount. This is a one-off £150 discount off your electricity bill.

If you’re eligible, your electricity supplier will apply the discount directly to your bill[3].

‘I’m in debt with my energy bills’: How PayPlan can help

If you’re worried about affording your energy bills, or are currently in arrears with your bills, we’re here to help. Call us on 0800 813 1833, or head to our website to start a chat today.

It’s also worth checking whether you’re eligible for extra help. BudgetSmart has lots of tips and tools to guide you on maximising your income and making savings within your budget.

[1] Changes to energy price cap between 1 October and 31 December 2025

[2] Changes to energy price cap between 1 October and 31 December 2025

[3] The Warm Home Discount Scheme