Energy prices expected to rise ahead of winter

Energy prices will be set for millions of households for this autumn and winter, when regulator Ofgem announces its latest price cap later.

Analysts expect a slight rise in gas and electricity prices between October and December, despite having previously predicted a small fall.

A price rise of about 1% a year is likely, which campaigners say will mean another winter of relatively high energy bills.

Ofgem’s price cap sets the maximum that can be charged for each unit of gas and electricity for about 21 million households in England, Scotland and Wales.

The cap sets the price for each unit, but not the total bill which depends on how much energy you use.

It will be set at 07:00 BST, with the change coming into force at the start of October and lasting for three months.

Experts at energy consultancy Cornwall Insight predicted the typical household energy bill will rise by £17 to £1,737 per year when the new price cap comes into force.

This relates to a home using a typical amount of energy. There is forecast to be a 1% annual rise in energy prices, so individual households can calculate their estimated specific change by adding £1 onto every £100 they spend on energy each year.

Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets.

However, the predicted rise in bills this time is partly the result of extra support measures, previously announced by the government and in place this winter.

Anyone on means-tested benefits will automatically receive the £150 Warm Home Discount on their bills. Some previously did not qualify owing to the size of their property, but that condition will be scrapped.

All billpayers will chip in to fund this extra support, which is on top of the government’s U-turn on winter fuel payments.

Campaigners say many households are still struggling to pay bills, as well as repay energy debt that built up during a period of high prices.

Simon Francis, coordinator of the End Fuel Poverty Coalition, said this would mean another winter of high prices.

“The average family still paying hundreds of pounds more than they did just a few years ago,” he said.

Families enjoying chips at New Brighton, Merseyside, may have been making the most of the sunshine, but the cost of living still looms large.

“At the moment, it’s been ok, but I think the winter might be a different story,” said Elisha, who has an 11-week-old baby, Theo.

The consumer group Which? said it could be a good time to shop around for a fixed-price deal, but billpayers should be alert to exit fees.

“Some contracts charge large fees to leave early, which would cancel out any savings,” said Emily Seymour, from Which?.

A Department for Energy Security and Net Zero spokeswoman said: “The only way to bring down energy bills for good is with the government’s clean energy superpower mission, which will get the UK off the rollercoaster of fossil fuel prices and on to clean, homegrown power that we control.

“We are taking urgent action to support families this winter – in addition to expanding the £150 Warm Home Discount to 2.7 million more households, we are strengthening customer protections, including by giving people quicker and easier access to automatic compensation when their suppliers let them down.”