Winter energy prices expected to rise to three-year high

Energy bills for millions of households across the UK are projected to climb this winter to their highest level in three years, under a forthcoming price cap announcement scheduled by the industry regulator.

The updated cap will reflect rising wholesale gas costs paid by suppliers, hitting consumer bills just as colder weather sets in from October through the end of December.

Market analysts anticipate that Ofgem will announce a 4 percent increase compared to the existing cap, directly impacting consumers on variable tariffs across England, Scotland, and Wales.

This upward pressure is largely driven by volatility in international wholesale gas markets. According to trade body Energy UK, average gas prices over the past three months have run 61 percent higher than in late 2025, prompting roughly 40 percent of billpayers to lock into fixed-rate tariffs.

Stock photo for illustration only, not from the actual event

On the financial front, suppliers report that unpaid energy bills have escalated sharply. Energy UK estimates that total collective debt has climbed to 6,000 million pounds, with projections pointing to 7,000 million pounds by the end of the year. For the average billpayer in debt without a structured payment plan,

• The outstanding amount stands at 3,500 pounds per household.
• Debt charities and trade unions are heavily pushing for a national social tariff and structured write-off schemes.
• The government plans to reduce VAT on electricity bills in October, which is expected to shave about 50 pounds off a typical annual bill.

"Without urgent intervention – namely a national social tariff and implementation of the long-awaited debt write off scheme from Ofgem – we expect this figure to rise in the coming months, and with that see an increase in the number of people coming to us for help with energy bills"

Emily Whitford, StepChange

Source: BBC Business