Energy prices to rise by 10% from October: should you fix a deal now?

Energy customers face bigger winter energy bills after a 10% increase to the price cap was announced this morning. 

The energy price cap on variable tariffs is rising again in October, after it dropped twice earlier this year. The new rates will add around £12 to the typical household's bill each month.

Your energy bills won't be as big as last winter, but they'll still be much pricier than they were before the energy crisis. Plus, fewer people will get government support to help pay their bills this year.

The price cap isn't a limit on your total bill. What you pay still depends on how much you use. 

These changes won't affect you if you have signed up to a fixed deal.

See the cheapest deals you can switch to and our tips on how to get the best energy deal.

How much will I pay for energy in October 2024?

You may have seen that the figure for the new price cap is £1,717. This isn't what everyone will pay – it's an illustrative figure that applies to a 'typical' household using a 'medium' amount of gas and electricity. 

Energy regulator Ofgem, which sets the price cap, defines this amount as 11,500kWh gas and 2,700kWh electricity per year. If you use more or less than this, your total price-capped bill will be different. 

That illustrative household could expect to add an extra £12 a month to their energy bill. 

To get a better estimate of what you'll pay, look at the average unit rates and daily standing charges, and how they compare to what you're paying now. 

For direct debit customers between 1 October to 31 December 2024, these are:

• Electricity unit rate: 24.5p/kWh
• Electricity standing charge: 60.99p/day
• Gas unit rate: 6.24p/kWh
• Gas standing charge: 31.66p/day

The unit rates are a penny or two higher than the current ones. Standing charges have risen by less than a penny.

Prices also vary by where you live and how you pay. For example, each unit of electricity under this price cap costs 2.5p more on average in North West England compared with the North East.

Your energy supplier should contact you to let you know your new prices before it starts charging them.

The price cap doesn't apply if you live in Northern Ireland.

Find out more: what is the energy price cap?

Should you fix your energy prices?

When we checked yesterday, there were just four fixed tariffs that would save you money compared with the current price cap, in place from July. 

However, there are around 20 tariffs that work out cheaper than the higher price cap from October. It's worth considering a fixed deal as predictions indicate that the price cap is expected to increase again in the new year. 

A typical medium household could save around £125 a year compared with the October price cap by choosing the cheapest fixed-price deal, even though that means paying a little more than the current price cap between now and October. Remember, you're likely to use many more units of energy from October onwards for heating your home.

Tariffs that track the price cap are also worth considering. Two that we've found adjust their rates to consistently charge £50 less than the price cap, so you're guaranteed not to overpay as the price cap changes.

Before you switch, compare what your monthly payments would be on a fixed deal with what you'd expect them to be on the price-capped tariff. Watch out for exit fees, which can be up to £75 per fuel if you want to leave early. 

Use our free independent energy comparison tool to compare gas and electricity tariffs. 

Why is the energy price cap rising?

Wholesale energy prices have risen, particularly since the start of August. These prices are the biggest cost factored into the price cap.

The market still hasn't completely recovered from the energy crisis and the impact of Russia's invasion of Ukraine, according to Cornwall Insight. So it's still very sensitive to global events. The UK is particularly vulnerable to this because it relies heavily on imported energy.

It's expected that the price cap will increase again slightly in January 2025.

Here's how to get help if you're struggling to pay your energy bill.

How can I pay less for energy?

Take a meter reading on or close to 31 August and send it to your energy supplier. If you have a smart meter sending daily readings, it should do this for you. 

This helps to make sure you pay the lower price-capped rates for as long as possible.

Also try these tips:

• See if you could save by switching. Make sure you're on your supplier's cheapest deal. Use our energy comparison tool to see if you could pay less.
• Pay by direct debit if possible. It's a cheaper way to pay than when you receive a bill. Prepayment customers pay slightly less under the price cap but have a much smaller choice of cheaper fixed deals.
• Check your account every month to make sure your meter readings are getting through and you're not being charged based on estimates.
• Question unexpected direct debit changes. Ask your supplier to explain how and why it has calculated the change.
• Get in the habit of using your appliances more efficiently. Dry clothes outside while it's still warm enough, do laundry at 30°C, use eco settings on appliances where available and don't boil more water in your kettle than you need. None of these will save loads of money straight away, but changing your habits in the long run means the savings will slowly add up.
• Check your home's energy efficiency and see where you can make changes. Heating is likely to make up the lion's share of your energy bill. Head to our advice on home energy efficiency for tips – all the way from small jobs you can do to improve your draught-proofing to bigger insulation and home heating updates. 

Read more: get tips on 10 ways to save on energy bills.