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| Version 140 | Version 141 |
|---|---|
| How much gas and electricity does a typical household use? | |
| (about 2 months later) | |
| Published6 August 2021 | Published6 August 2021 |
| Typical gas and electricity bills will increase slightly on 1 October when a new energy price cap takes effect. | |
| It follows a drop in prices at the start of July, but there are concerns that bills remain unaffordable for some. | |
| The energy price cap sets the maximum amount customers can be charged for each unit of energy, but actual bills depend on how much gas and electricity you use. | The energy price cap sets the maximum amount customers can be charged for each unit of energy, but actual bills depend on how much gas and electricity you use. |
| What is the energy price cap and how is it changing? | What is the energy price cap and how is it changing? |
| The energy price cap covers around 20 million households in England, Wales and Scotland and is set every three months, external by Ofgem. | |
| It fixes the maximum price that can be charged for each unit of energy on a standard - or default - variable tariff for a typical dual-fuel household which pays by direct debit. | It fixes the maximum price that can be charged for each unit of energy on a standard - or default - variable tariff for a typical dual-fuel household which pays by direct debit. |
| From 1 October, the annual bill for a dual-fuel direct debit household using a typical amount of energy will be £1,755, up £35 a year on the previous cap. | |
| Between 1 October and 31 December 2025, gas prices are capped at 6.29p per kilowatt hour (kWh) and electricity at 26.35p per kWh, external. | |
| The cap does not apply in Northern Ireland, which has its own energy market. | The cap does not apply in Northern Ireland, which has its own energy market. |
| What is a typical household? | What is a typical household? |
| Your energy bill depends on the overall amount of gas and electricity you use, and how you pay for it. | Your energy bill depends on the overall amount of gas and electricity you use, and how you pay for it. |
| The type of property you live in, how energy efficient it is, how many people live there and the weather all make a difference. | The type of property you live in, how energy efficient it is, how many people live there and the weather all make a difference. |
| The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit. | The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit. |
| The vast majority of people pay their bill this way to help spread payments across the year. Those who pay every three months by cash or cheque are charged more. | The vast majority of people pay their bill this way to help spread payments across the year. Those who pay every three months by cash or cheque are charged more. |
| Should I take a meter reading when the energy cap changes? | Should I take a meter reading when the energy cap changes? |
| Submitting a meter reading when the cap changes means you are not charged for estimated usage at the wrong rate. | |
| This is especially important when prices go up. | This is especially important when prices go up. |
| Customers with working smart meters do not need to submit a reading as their bill is calculated automatically. | Customers with working smart meters do not need to submit a reading as their bill is calculated automatically. |
| What is happening to prepayment customers? | What is happening to prepayment customers? |
| About six million households have prepayment meters, according to Ofgem. | |
| Prepayment customers were previously charged more than those who settle their bill by direct debit, but now pay slightly less. | |
| From 1 October, the typical annual bill for prepayment customers will be £1,707. | |
| Many pre-payment meters have been in place for years, but some were installed more recently after customers struggled to pay higher bills. | Many pre-payment meters have been in place for years, but some were installed more recently after customers struggled to pay higher bills. |
| Rules introduced in November 2023, external mean suppliers must give customers more opportunity to clear their debts before switching them to a meter. They cannot be installed at all in certain households. | Rules introduced in November 2023, external mean suppliers must give customers more opportunity to clear their debts before switching them to a meter. They cannot be installed at all in certain households. |
| Can I fix my energy prices? | Can I fix my energy prices? |
| Fixed-price deals are not affected by the energy price cap, which changes every three months and can rise and fall. | Fixed-price deals are not affected by the energy price cap, which changes every three months and can rise and fall. |
| They offer certainty for a set period - often a year, or longer - but if energy prices drop when you are on the deal, you could be stuck at a higher price. You may also have to pay a penalty to leave a fixed deal early if you change your mind. | |
| Ofgem, the energy regulator, says customers who want the security of knowing what their bill will be should consider moving to a fixed deal. However, it says they should make sure they understand all the costs. | Ofgem, the energy regulator, says customers who want the security of knowing what their bill will be should consider moving to a fixed deal. However, it says they should make sure they understand all the costs. |
| Martin Lewis, founder of Money Saving Expert, recommends checking whole-of-market energy price comparison sites to help find the best deal. | Martin Lewis, founder of Money Saving Expert, recommends checking whole-of-market energy price comparison sites to help find the best deal. |
| What are standing charges and how are they changing? | What are standing charges and how are they changing? |
| Standing charges are a fixed daily fee to cover the costs of connecting to gas and electricity supplies. They vary slightly by region, external. | Standing charges are a fixed daily fee to cover the costs of connecting to gas and electricity supplies. They vary slightly by region, external. |
| From October, standing charges will typically be 53.68p a day for electricity and 34.03p a day for gas. | |
| Campaigners argue standing charges are unfair because they make up a bigger proportion of the bill of low energy users. | Campaigners argue standing charges are unfair because they make up a bigger proportion of the bill of low energy users. |
| In response, Ofgem has said that energy firms must provide a choice of price-capped tariffs from winter 2025. | In response, Ofgem has said that energy firms must provide a choice of price-capped tariffs from winter 2025. |
| One would have a standing charge and unit rate - as is the case now - and another no standing charge but a higher unit rate. However, the proposals have been criticised for being too complicated. | |
| What help can I get with energy bills? | What help can I get with energy bills? |
| The Household Support Fund, external, which was introduced in September 2021 to help vulnerable customers, has been extended until March 2026. | The Household Support Fund, external, which was introduced in September 2021 to help vulnerable customers, has been extended until March 2026. |
| The Warm Home Discount scheme, external is also being overhauled. From winter 2025, anyone on means-tested benefits will automatically see £150 taken off their bills, no matter what size of property they live in. | |
| The government's Fuel Direct Scheme, external can help people to repay an energy debt directly from their benefit payments. | The government's Fuel Direct Scheme, external can help people to repay an energy debt directly from their benefit payments. |
| In addition, suppliers must offer customers affordable payment plans or repayment holidays if they are struggling with bills. | In addition, suppliers must offer customers affordable payment plans or repayment holidays if they are struggling with bills. |
| Most suppliers also offer hardship grants. | Most suppliers also offer hardship grants. |
| Ofgem: Help with bills, external | Ofgem: Help with bills, external |
| Ofgem: Help with bills, external | Ofgem: Help with bills, external |
| Get in touch | |
| How are you managing with the rising cost of living as a consumer or as a business owner? Share your experiences. | |
| Related topics | Related topics |
| Money | Money |
| Ofgem | Ofgem |
| Personal finance | Personal finance |
| Energy industry | Energy industry |
| Personal debt | Personal debt |
| Cost of Living | Cost of Living |
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