Consumers with major UK energy suppliers, including British Gas, EDF, EON, Ovo, and Octopus, are set to see a rise in their bills this October. The new Default Tariff Cap, set to increase by £17, is expected to impact millions of households, adding to the financial strain as winter approaches.
According to Cornwall Insight’s latest forecast, the cap for typical dual-fuel households will rise to £1,737 per year from October 2025 to December 2025. While the increase is modest at just 1%, it reflects the continued volatility and complexity of energy pricing, even as wholesale costs remain relatively lower. The rise comes ahead of Ofgem’s official announcement scheduled for 27 August.
The Impact of the Energy Price Cap on Households
The Default Tariff Cap, introduced by the energy regulator Ofgem, is designed to prevent consumers from paying excessive prices for their energy. The rise to £1,737 per year represents an increase of £17 from the current cap, which stands at £1,720. This adjustment, although small, has significant implications for millions of UK households already grappling with high living costs.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight, commented on the rise, highlighting that the price cap reflects more than just market prices. “While the added costs behind this forecasted rise are aimed at supporting those most in need, it does mean typical bills will increase despite relatively lower wholesale costs,” he said. As the cost of energy remains a major concern, many households will be watching Ofgem’s official announcement closely, hoping for greater clarity on future trends.
Although the wholesale price of energy has softened in recent months, other factors—such as increased system costs and financial support schemes—have contributed to the higher bills forecasted for the coming winter.
Long-Term Energy Transition: Will It Bring Relief?
While the immediate impact on consumers is undeniable, experts have pointed to the long-term benefits of transitioning towards cleaner, more sustainable energy sources. Dr Lowrey also suggested that the energy landscape in the UK is set for a major shift, with a move towards renewable energy and greater energy independence. However, this transition will require significant investment and adaptation.
The shift to cleaner power could ultimately lead to more affordable and stable energy prices. But as Lowrey noted, this transition won’t be immediate or painless: “The real hope for lasting relief lies in the longer-term transition towards clean power and energy independence, which offers the greatest prospect of both stability and lower costs.”
For now, though, the challenge of rising bills is top of mind for many consumers. With the energy system undergoing significant changes, the financial burden on households is unlikely to ease in the near future.
