Energy Price Cap Rises for Winter 2025
Starting October 1st, the UK energy price cap will climb by 2%—raising annual bills for a typical dual-fuel household on a variable tariff to £1,755, according to Ofgem’s latest adjustment. This means most homes will pay roughly £2.93 more per month, or £35 extra over the winter quarter, just as energy demand surges with colder weather. While the increase is modest, it arrives when many families already face pressure from high inflation, food prices, and housing costs.
Why is the Price Cap Changing Now?
Ofgem’s quarterly price cap reflects costs from wholesale energy markets and rising transmission charges. This year, additional costs arose from transmission and grid management—such as switching on gas plants or paying wind farms to curtail production—which contributed to the higher cap, alongside inflation and government support measures. The expansion of the Warm Home Discount scheme also creates a £15 uplift for all bills, funding more support for vulnerable households.
How Much Will Bills Actually Increase?
- The price cap moves from £1,720 (July–September 2025) to £1,755 (October–December 2025).
- Direct Debit users will see monthly bills around £102 compared to £100 before—based on typical usage.
- Electricity unit rates rise to 26.35p per kWh and standing charges to 53.68p per day; gas standing charges also increase, while the unit price dips slightly.
- Fixed tariff customers—about a third of UK billpayers—won’t see immediate impact.
Even though bills remain far below the 2023 peak (£4,279), this winter’s increase hits when energy use is highest and household budgets are strained.
Who Will Feel the Effects Most?
Lower-income families, renters, and pensioners—especially those in poorly insulated homes—will shoulder the greatest burden as heating becomes non-negotiable in winter. A third of UK adults lowered their heating last year to cut costs, and over 20% turned off heat completely. Poor insulation and rising food and housing costs further squeeze those least able to absorb increases, risking cold homes or difficult choices as essential costs mount.
Price Cap and Standing Charges Explained
The price cap limits what suppliers can charge per unit of energy and sets standing charges—the daily fixed cost for connection. Standing charges for electricity increase 4%, while gas rises 14% this winter—contributing significantly to monthly bills for low-volume users. Actual bills depend on consumption, with regional and payment method variations.
If on a prepayment meter, standard credit, or Economy 7, the cap still applies. Northern Ireland operates under a separate scheme.
Will Bills Drop After Winter?
Forecasts from Cornwall Insight and others suggest a potential fall in January 2026, but the outlook is uncertain and depends on weather, wholesale prices, global energy shocks and domestic policy, including the Autumn budget. Energy prices are likely to remain higher than pre-crisis levels for some time, with any drops likely to be incremental rather than dramatic.
What Can Consumers Do?
- Review tariffs: Explore fixed deals, but beware high exit fees.
- Reduce usage: Improve insulation and be mindful of peak hours.
- Direct support: Those on benefits may qualify for the expanded Warm Home Discount or other government help.
- Explore renewables: Solar PV and battery systems, installed by Atlantic Renewables, can protect against future volatility and reduce exposure to market increases—contact our team for a tailored quote and engineer advice.
Get in touch
Facing rising bills and want practical solutions or to explore solar upgrades? Atlantic Renewables’ engineers offer efficiency upgrades and expert advice for UK businesses and homes. Call 0161 207 4044 for a winter-ready energy plan.
