Energy Costs Climb for UK Households Amid Colder Weather
UK households are preparing for higher energy bills this winter as Ofgem's price cap increases by 2% starting October 1. The adjustment means the average annual energy bill for households paying by direct debit will rise from £1,720 to £1,755, coinciding with cooler temperatures that prompt many to activate central heating systems. According to Uswitch calculations, the average home on a standard tariff would spend £140 on energy in October compared with £63 in September, reflecting both higher rates and increased autumn usage.
The End Fuel Poverty Coalition noted this latest increase represents a 2.21% year-on-year rise, meaning energy bills will be 68% or £713 higher than during the winter of 2020-21. This comes despite wholesale prices falling by 2% over the three months preceding Ofgem's price cap decision. Standing charges—the daily fee consumers pay to have energy supplied to their homes—are set to rise by 4% for electricity and 14% for gas, or 7p per day, primarily driven by the government's expansion of the Warm Home Discount program.
More than seven million households remaining on standard energy tariffs have been advised to submit meter readings to avoid paying inflated prices from October 1. Simon Trevethick, head of communications at StepChange debt charity, warned that while the £35 annual increase "seems like a small amount," fresh data reveals a 32% surge in average energy arrears among clients seeking debt guidance over the past two years. "Energy arrears are the most common type of debt across household bills that we see at StepChange, and people have had little respite from steep costs over the past three years," Trevethick stated.
Around 35 million households are on standard variable tariffs controlled by Ofgem's price cap, though actual bills may vary significantly from the average figure. The price cap limits the maximum amount suppliers can charge per unit of energy but does not cap total bills, meaning households using more energy will pay more. Payment methods also affect costs, with direct debit being the cheapest option at £1,755 annually, prepayment meter users paying £1,707, and those paying after receiving a bill facing the highest costs at £1,890 due to administrative fees. Regional differences further impact bills, as Distribution Network Operators set varying unit rates and standing charges across different areas.
