What you need to know about the energy price rise

You’ve probably seen the headlines – energy prices are going up again. For many households, that news lands with a mix of worry and frustration, especially with winter on the way.

If there’s light in this situation, it’s that you don’t have to face it alone. In this guide, we’ll unpack what’s changed, why it’s happening, and practical steps you can take to keep on top of your bills.

What’s happening with energy prices?

Energy prices have a cap which is managed by Ofgem. This means that they manage how much companies can charge you per unit for your household energy and gas bills if you’re on a standard/variable tariff.  

On October 1^st, this cap was raised by 2%* and will remain at this level until December 31^st 2025. Throughout this period, the rise is expected to cost the average household an additional £8.75 for energy and gas bills. This works out at around an extra £2.93 a month, or an extra £35 per year[1].

It doesn’t mean everyone’s bills will jump by the same amount, but most homes will notice higher monthly payments, especially as heating use rises throughout the colder

months.

*The 2% increase applies to a typical dual-fuel household, using both electricity and gas on a standard tariff for their bills. This means that your energy bill rate is variable and you pay by Direct Debit, a prepayment meter or standard credit.

If you want to learn more about the updated price structure, you can view this here.

Why Are Prices Rising Again?

You might be wondering why prices are climbing again after a few months of relief. The main reason driving the price rise is inflation. As the weather gets colder, the demand for energy and gas goes up because more people are using it to heat their homes.

As more energy and gas is being used around the UK, it will cost your supplier (such as Eon or Octopus) more to buy this to provide it to your home. That’s essentially inflation in a nutshell, but if you want to learn more about what inflation is, you can watch our bitesize video here.

 

What does this mean for you?

If you’re on a standard variable tariff, you’ll likely see your direct debit rise slightly to reflect the new rates. For people using prepayment meters, top-ups may not go as far as they did in the summer.

The exact amount depends on how much energy you use - so while the price per unit has gone up, using less energy at home can still make a noticeable difference to your bill.

If you’re on a fixed-rate tariff, the 2% increase will not impact your bills.

 

What can you do to stay on top of costs?

If the energy price rise is a worry, the most important thing to remember is that you have options.

Small tweaks like lowering your thermostat by one degree or even switching appliances fully off can add up to meaningful savings and make the difference for you during this increase. Being vigilant with which plugs are switched on when might just help.

If you’re a My Money Matters user, you can use our must-have Money Management service at no cost to you. Using the Snoop app, you can view all your bank accounts in one place, track your spending, set budgets, reduce your bills and control your finances with smart recommendations. Take advantage of our Money Management service here and gain access to valuable tools to help you beat the cost of living increases.

Aside from Snoop, you may also be eligible for various discounts, support schemes or grants that can help with your bills this winter.

If you’re struggling to pay, it’s important to talk to your supplier early. Most suppliers offer hardship funds or payment plans so you don’t have to wait until you fall behind.

List of potential discounts/support:

Warm Home Discount – This will give you a one-off £150 discount on your electricity bill if you’re in a low-income household or have guaranteed pension credit. You can check your eligibility here.

Winter Fuel Payment - If you were born before 22 September 1959 you could get between £100 and £300 to help you pay your heating bills this winter. This is known as a ‘Winter Fuel Payment’. If you’re eligible for this, you should get a letter between October and November outlining how much you will get.

Your local council may also provide a Warm Home Local Grant scheme. This scheme provides free energy efficiency upgrades like insulation and heat pumps for low-income households with an Energy Performance Certificate (EPC) rating of D, E, F or G. You can check your local council’s website to see if they offer this scheme.

If you’re based in England, Wales or Northern Ireland, you can check your EPC rating here. However, if you’re based in Scotland you can check your rating here.

Looking Ahead

There’s reason to hope that things will steady. Analysts expect that the cost for suppliers to buy gas and energy will gradually fall throughout 2026. The UK is also investing heavily in renewable energy, which should help make energy and gas prices more stable in the long-term.

It is important to note that the energy price cap is reviewed and updated every three months. Ofgem confirmed that future cap levels will be announced on the following dates:

· 25 November 2025 – for the period 1 January 2026 to 31 March 2026

· 25 February 2026 – for the period 1 April 2026 to 30 June 2026

· 27 May 2026 – for the period 1 July 2026 to 30 September 2026

In the meantime, My Money Matters are here to keep you informed and continue to help you take small and meaningful steps to make you feel more confident about your finances, especially this winter.

We know that rising bills can be stressful, especially when it feels like so much is out of your hands. But there are ways to ease the pressure and support available if you need it.

Take a moment to review what help you can claim, talk to your energy supplier early if you’re worried, and use trusted tools and advice to stay in control of your finances.

If you'd like to reach out about how our services could support you, you can email us at support@my-money-matters.co.uk or call us on 01252 959 779.

Disclaimers

My Money Matters has no control or responsibility for the external pages linked within this blog, or where any subsequent links you may take you.

This blog post is intended for general information purposes only. For personalised financial advice, please consult with a qualified financial adviser.

Information is based on our current understanding of UK energy price regulations. The information included in this blog is accurate as of October 2025.

[1] Data sourced via: https://www.ofgem.gov.uk/information-consumers/energy-advice-households/energy-price-cap-explained