Typical household energy bills in England, Scotland, and Wales are set to increase by 4% starting October 1, reaching their highest point in three years, according to an announcement by the energy regulator Ofgem.
The energy price cap will rise by £60 per year, or £5 per month, bringing the average annual cost for households using both electricity and gas to £1,723, assuming this level is sustained throughout the year.
Neil Kenward, Ofgem's director general for markets, attributed the rise to persistent high international gas prices. He noted that government intervention, specifically the removal of VAT from electricity bills, has mitigated even steeper increases for consumers this winter.
Kenward also highlighted that consumers can reduce their energy expenses by opting for fixed tariffs, which are currently priced at £100 or more below the new price cap. Additionally, suppliers are offering lower electricity rates to smart meter customers for energy consumed outside of peak hours. Prepayment customers are noted to pay the lowest price cap rates and could save an average of £45 compared to those paying by direct debit.