Following Ofgem announcing that the energy price cap will rise by 4% in October, organisations have shared concerns over the effect on household bills.
Under the new cap, electricity will cost an average of 26.32p per kWh, with a daily standing charge of 54.83p. Gas will cost 7.97p per kWh, with a daily standing charge of 29.68p.
It will apply from the 1st October to the 31st December 2026 and covers around 22 million households on default tariffs.
The government have removed VAT from electricity bills in an attempt to ease the pressure on families, however there are suggestions that other approaches will lead to better long term stability.
Nigel Pocklington, CEO of Good Energy, said:“If ministers want to deliver permanently lower bills, more ambitious action is needed. Immediate relief can be provided by moving remaining levies off bills and strengthening targeted support for vulnerable households.
“In the longer term, breaking the link between gas and electricity prices and making it cheaper to invest in homegrown renewable energy could reduce household energy bills by more than £270 a year.”
There has been great concern for lower-income households and how the rising energy bills will affect those families. Simon Francis, Coordinator of the End Fuel Poverty Coalition also says the VAT cut isn’t enough.
He said: “As with previous rises, it is the price of gas driving this latest increase. Every unit of gas used will be 27% more expensive than last winter and over 150% higher than at the end of 2020.
“Price rises fall hardest on the households who can least afford them, with millions forced to pay more for the same energy or ration the energy they use even further.”
This year saw a record number of energy supplier switches and the possible further increases happening in January may encourage more of this activity.
Richard Neudegg, Director of Regulation at USwitch.com, said: “While households may feel powerless, there is an escape route. The best current fixed deals will save you money straight away, let you avoid this increase, and protect you from future price shocks in January.
“With January’s potential rise already looming, fixing before October is the only way to dodge a double blow to your energy bill.”
Ofgem has urged households struggling with bills to contact their supplier, which can offer repayment plans, financial assistance and other support.
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