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Energy bills are set to increase by 4% a year from October for a household using a typical amount of gas and electricity, when the energy price cap goes up.
This will see the average annual bill increase from £1,663 a year to £1,723, based on the energy use of a typical domestic household using both electricity and gas. Without the Government’s decision to remove VAT on electricity bills from October, this figure would have been around £45 higher. Read more about this in our article Energy price cap to jump by 4% in October
It’s worth noting that Ofgem’s price cap only limits the amount you can be charged for each unit of gas and electricity you use, not how much your bills will be overall. Your bill is linked to the amount of energy you use, so if you live in a large property, for example, your costs may well exceed the price cap, and if you live in a smaller property, you may end up paying less than the price cap.
Here we answer your questions about your options when it comes to energy tariffs. We’ll regularly update this as the news around energy costs changes.
More competitive tariffs available
The good news is that recent months have seen providers starting to launch more competitive price energy deals. This means that if you’re currently on your provider’s default or standard tariff, you’ll almost certainly be able to save money by moving to a fixed tariff.
If you’re considering switching your energy provider, it’s worth doing plenty of research so you can be certain you’ve found the best possible deal to suit your needs. Comparison websites such as MoneySuperMarket, Uswitch and Compare the Market enable you to compare the latest energy tariffs, whether you’re looking for a fixed or variable deal.
Sarah Pennells, Consumer Finance Specialist at Royal London said:
”Our research shows that three in ten people have only been able to pay their gas and electricity bills ‘with difficulty’. For families living on a tight budget, higher energy bills could put even more pressure on their finances.
“If you’re worried about costs, now is a good time to check whether you’re on the best tariff and seek help early if you’re struggling. Don’t assume the energy price cap limits what you’ll pay, as your bill will still depend on how much energy you use and how you pay.”
Which tariff are you on?
If you’re considering moving to a different energy tariff, your first step should be to establish which tariff you’re currently on. As mentioned, you’ll usually be on a variable tariff, the cost of which is determined by the price cap, if your fixed energy tariff has ended and you haven’t switched to another deal.
You’re also likely to be on a variable tariff if you’ve never switched your energy tariff, or if you were with a supplier that’s gone bust and you’ve been moved to another provider. The majority of UK households are currently on the energy price cap guarantee.
The cap gives an estimate of the maximum amount per year that an average household using a ‘typical’ amount of energy will pay. However, it’s by no means a limit, as if you live in a large property or use a lot of energy, you’ll pay more than this. Read more in our article What is the energy price cap?
What if you’re locked into a fix?
If you’ve locked into a fixed rate energy tariff at a higher rate than the energy price cap due to energy price rises, it’s worth seeing whether there are any exit fees to leave your current deal. If there aren’t, they are relatively low, or it’s due to finish soon anyway, you may find you’re better off moving onto your provider’s default tariff unless cheaper tariffs become available.
If you’re on a fix that costs less than the energy price cap, you’ll continue on this until your fixed term ends. When your fix ends, see if it’s possible to switch your tariff again to another deal that’s lower than the cap.
Should I move to a fixed or discounted deal?
As mentioned, there are some competitive fixed and discounted deals available from some energy suppliers, and more deals are likely to be launched in the next few days and weeks. If you find a fixed tariff that is cheaper than the current price cap, you should be able to save money now, but will be able to reduce bills significantly when the cap rises in July..
It’s worth contacting your current energy supplier to ask if there are any deals they are offering that might be worth considering. Here are a few deals that are currently available but bear in mind that these change frequently:
One of the tariffs that’s likely to be worth considering is Fuse’s August 2026 Fixed (18m) V10 18 month fixed tariff, which is a dual fuel deal available to new and existing customers. This deal has £50 per fuel exit fees.
Other competitive options include E.on’s Next Fixed 24m Exclusive v9 24 month fixed tariff and Ecotricity’s EcoFixed MS 2 Year August 26 v3 24 month fixed tariff. These deals both have £100 exit fees per fuel, respectively.
Figures were correct at the time of writing (26/08/2026)
What can you do if you’re struggling to pay your energy bills?
It’s an extremely tough time for households battling rising costs across the board, from energy to food and other general utilities. As a first step, it’s worth contacting your energy provider if you’re struggling and slipping into the red. They may be able to help with a payment plan, or make other suggestions. Read more in our article What can you do if you can’t pay your energy bills?
If you were born before 22 September 1959 and your taxable income is lower than £35,000, you should be entitled to the Winter Fuel Payment to help with heating costs this coming winter. This is a tax-free amount of between £100 and £300, and the amount you receive depends on your age and anyone else in your household.
If you’re on a low income or claiming the Guarantee Credit element of Pension Credit, you may also qualify for the Warm Homes Discount Scheme, which is a one-off £150 discount on your electricity bill paid to your supplier between October and March. Find out more in our guide Are you eligible for help with heating costs?
If your home is poorly insulated, you may be able to make improvements through installing insulation and by draft-proofing windows and doors. You can find tips on how to reduce your energy bills in our article Energy saving tips: how to reduce your bills.
It’s also well worth checking whether you might be able to reduce some of your other outgoings, so you can free up a bit of extra cash to help you cover rising energy costs. Our article Seven ways to save on your household bills explains how you may be able to make savings.
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