Today, Ofgem confirmed what Martin Lewis had predicted: the UK’s energy price cap will go up by 2% on October 1, adding an extra £2.93 a month to the average bill.
The regulator blamed the latest rise – which impacts around 65% of households in England, Scotland and Wales – on ‘volatile international gas markets’.
Director general of markets at Ofgem, Tim Jarvis, said in a statement: ‘While today’s change is below inflation, we know customers might not be feeling it in their pockets… We continue to work with the Government and the sector to diversify our energy mix.’
Thankfully though, there is a way to not only avoid the worst of the increase but beat it entirely, with Money Saving Expert (MSE) claiming it could result in a saving of £250 a year based on typical usage.
And the personal finance site founder’s advice is simple: ‘It is a pants cap, most on it could save £100s by ditching it. If you’re not on a fix, consider it ASAP.’
According to MSE, the cheapest year-long standalone fixes right now are about 15% less than the current cap (and about 17% less than the new October cap) so acting now could really pay.
That means, ‘if you get a good fix now, you can lock in at a cheaper rate for a year, get price certainty and save instantly.’
On X, Martin explained that you’re guaranteed cheaper bills until at least December 31 with this method, adding: ‘The extremely strong likelihood is you’ll continue to save substantially after that too…
‘For getting a cheap fix right now not to be worth it we’d need to see pretty immediate and monumental falls in wholesale rates – which no one is predicting.
‘In fact, our analysis shows that at every point over the last 18 months you’d have been better off getting the getting the cheapest fix than being on the cap.’
What is the energy price cap?
The energy price cap sets the maximum limit suppliers can charge people for their energy use.
The latest cap is now set between October 1 and December 31 at £1,755 per year for a household who uses electricity and gas and pay by Direct Debit.
In comparison, the previous cap between July 1 and September 30 was £1,720.
Your bills will be affected by the rise if you pay for electricity and gas by standard credit, Direct Debit, a prepayment meter or an Economy 7 (E7) meter.
How to switch to a fixed energy tariff
Since your cheapest fix depends on where you live and how much you use, it’s a good idea to start off by putting your details into a comparison tool (like MSE’s Cheap Energy Club).
Once you’ve looked at what’s available to you, choose the best option and go through the steps shown by the provider.
Just make sure to double check whether your smart meter will continue to work in smart mode afterwards, and that you aren’t on an existing contract that could incur exit fees.
Regardless of which deal you choose though, the new price cap will come into play on October 1 and will last for three months, so you should definitely make the switch before then.
Popular price capped tariffs
If you’re on one of the following deals, what you pay is determined by the price cap:
- British Gas Standard Variable
- EDF Standard (Variable)
- E.on Next Next Flex
- Octopus Flexible Octopus
- Ovo Simpler Energy
- Scottish Power Standard
Alongside fixed rate tariffs, it’s worth looking into specialist alternatives that could save you cash.
For example, EDF and British Gas both offer special tracker deals, which discount up to £50 off the annual standing charge (potentially saving you more if you have low using).
Alternatively, there are electric vehicle tariffs which could help EV drivers keep costs down, and rapid price-change options offering lower prices outside of peak periods for those who are able to shift their daily usage routine.
If you’re still struggling to pay, Martin recommends speaking to your energy provider to see how they can help.
‘Be polite and straight with it, and make sure you explain if you’re vulnerable,’ he says.
They may be able to put you forward for a hardship and debt grant, or work with you to negotiate a payment plan you can afford – everything’s decided on a case-by-case basis.
Under Ofgem rules, suppliers are obligated to help struggling customers, so get in touch with yours as soon as possible if you’re worried about your ability to pay.
How can I lower my energy bills?
Amy Knight, personal finance expert at the financial comparison website NerdWallet UK, told Metro: ‘While cutting down on energy use can help save money on bills, this isn’t always an option. Instead, focus on getting more value from the money you spend heating your home.’
Here are her top tips to keep fuel bills low this winter:
Ask for a refund if you’re overpaying into your energy bill by direct debit
If you’re several hundreds or even thousands in credit, your direct debit is probably set too high.
You can ask for a refund of most of the balance and adjust your direct debit to be lower. Be aware though, it is normal to be in credit this time of year because most households use less energy in the summer versus the winter when we have the heating on.
How hot do you need your water?
Heating water uses a lot of energy, so you can turn down the flow temperature of your boiler to shave a little off your bills.
As long as the water from your hot tap is comfortable to have a bath in, you don’t need to set it any hotter. You can do this manually or you may be able to ask a heating engineer to fit a device called a ‘weather compensator’.
Remember where warm air comes from
Keep radiators uncovered to maximise the benefit when they’re on. If you have long curtains covering your radiators, leave them open to make sure the warm air circulates into the room, not out of the window.
Look at the label
When shopping for a new appliance such as a washing machine or fridge, look at the efficiency ratings. If your budget can stretch to A or B-rated white goods, these can help lower your energy usage long term.
A version of this story was first published on February 25, 2025.
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