Ofgem has confirmed the UK energy price cap will rise by 4% on October 1, adding £60 a year to a typical dual fuel bill. Martin Lewis’ Money Saving Expert (MSE) is advising households to consider fixing their energy tariff now to lock in rates that are around 11% cheaper than the upcoming cap.
The regulator attributed the increase to ‘volatile global gas markets’ driven by the ongoing Middle East conflict. Around 65% of households in England, Scotland and Wales will be affected, with prices reaching their highest level in three years. Neil Kenward, director general of markets at Ofgem, said: ‘High international gas prices are continuing to drive energy costs in the UK. We welcome the Government’s intervention to remove VAT from electricity bills, without which customers would have faced even higher costs this winter.’
What the new cap means for your bills
The price cap sets the maximum amount suppliers can charge per unit of energy. From October 1 to December 31, the cap for a typical household paying by Direct Debit will be £1,723 per year, up from £1,663 in the previous period (July 1 to September 30).
Broken down by fuel, the average gas unit rate will rise from 7.33p to 7.97p per kWh (up 8.7%), while the gas standing charge increases from 29.04p to 29.68p per day (up 2.2%). For electricity, the unit rate rises from 26.11p to 26.32p per kWh (up 0.8%), but the standing charge actually falls from 57.19p to 54.83p per day (down 4.1%).
Martin Lewis noted on X that the cap only lasts three months and changes again on January 1, 2027, adding: ‘sadly it’s currently predicted to rise substantially again then, though that’s a bit of crystal-ball gazing.’
Should you fix now or wait?
MSE says the cheapest fixed deals available are about 8% less than the current cap, or roughly 11% less than the October cap. For those on a standard variable tariff, the team advises: ‘The risk averse thing to do right now is to fix your energy, as this will lock in your rates for a year.’
However, there are caveats. Martin warns that ‘fixes were quite a bit cheaper about six weeks ago’, so ‘if, and it’s a big if, things in the Middle East settle down you may be able to fix at far lower prices in future.’ He suggests that ‘someone who has been on the standard tariff for ages, then the safest thing is just to get a cheap fix now,’ while ‘if you’re a regular fixer who’ll monitor the market, there’s a chance waiting may turn out to be better.’
MSE also stresses that you shouldn’t ‘just grab any fix’ – it must be at least cheaper than the current cap to protect against future increases, and these offers are going fast.
How to switch and what to check
To find the best deal, start by entering your details into a comparison tool like MSE’s Cheap Energy Club. Once you’ve chosen a tariff, follow the provider’s steps. Before switching, double-check that your smart meter will continue to work in smart mode and that you aren’t on an existing contract with exit fees.
The new cap takes effect on October 1 and lasts three months, so any switch should be made before then. Popular price-capped tariffs include British Gas Standard Variable, EDF Standard (Variable), E.on Next Next Flex, Octopus Flexible Octopus, Ovo Simpler Energy, and Scottish Power Standard.
Beyond fixed deals, specialist options exist: British Gas offers a tracker deal with up to £60 off the annual standing charge, and electric vehicle tariffs can help EV drivers. Rapid price-change options offer lower prices outside peak periods for those who can shift their energy use.
If you’re already on a fixed deal ending in less than 50 days, you can switch without exit fees. But MSE notes that since few cheap tariffs remain below the cap, ‘you may be better waiting and regularly doing a comparison to see if cheaper fixes become available over the next few weeks.’ If you have more than 50 days left, switching now ‘will likely mean you’ll pay more and will almost certainly have to pay early exit fees.’
Amy Knight, personal finance expert at NerdWallet UK, told Metro: ‘While cutting down on energy use can help save money on bills, this isn’t always an option. Instead, focus on getting more value from the money you spend heating your home.’ Her tips include asking for a refund if you’re overpaying by direct debit, turning down boiler flow temperature, keeping radiators uncovered, and choosing A or B-rated appliances when shopping.
