Energy price cap rises Thursday — what changes on October 1
Ofgem's price cap rises 4% on Thursday 1 October, taking the average direct-debit bill to £1,723 a year — while VAT is removed from electricity bills in a move that softens the blow.
More than four million homes on standard energy tariffs will see their bills rise from Thursday, when Ofgem’s price cap increases by 4%, according to PA reporting carried by the Leigh Journal (https://www.leighjournal.co.uk/news/national/26593013.ofgem-energy-price-cap-hike-set-take-effect-household-bills/).
The increase takes the energy bill for the average household in England, Scotland and Wales paying by direct debit for gas and electricity to £1,723 a year — up £5 a month or £60 a year if sustained over 12 months. Ofgem announced the change on 26 August.
The October 1 hike includes the Government’s decision to remove VAT from household electricity bills, which also takes effect on Thursday. The removal of the 5% levy until 31 March next year will save the average bill payer around £45 a year, Government estimates show. The policy was one of Andy Burnham’s first moves as Prime Minister to ease household bills, announced in July on the day after he took over the post. Households will still pay 5% VAT for gas.
Ofgem said the increase reflected higher wholesale gas prices as a result of the ongoing conflict in the Middle East, with volatile global markets remaining the dominant driver of price changes.
Comparison site Uswitch urged households without smart meters to send in readings to their supplier by the end of the month to avoid being charged higher rates for energy used before October 1 (https://www.grimsbytelegraph.co.uk/news/uk-world-news/millions-told-take-action-today-11177561).
The regulator will announce its next price cap, covering January to March 2027, in November; EDF has forecast a 30% rise to £2,098.
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