Tue, 26 Aug 2025

Tue, 26 Aug 2025 Energy price cap: How much gas and electricity does a typical household use?

Gas and electricity prices are expected to rise slightly under Ofgem's price cap.
Energy prices are expected to rise slightly during autumn and winter, after a new price cap takes effect on October 1. The increase follows a previous fall in July, but bills remain unaffordable for many households. The energy price cap sets a maximum amount customers can be charged per unit of energy, but actual bills depend on usage. Approximately 21 million households in England, Wales, and Scotland are covered by the cap, which is set every three months by Ofgem. As of July, gas prices were capped at 6.33p per kWh, while electricity was capped at 25.73p per kWh. Those paying cash or cheque have higher bills, while prepayment meter users pay slightly less. The type of property, energy efficiency, and usage all affect energy bills. The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity per year, with a single bill settled by direct debit. Prepayment meter users have seen a typical annual bill of £1,672 since July, while direct debit households pay around £1,720. Fixed-price deals are not affected by the energy price cap but offer certainty for a set period at a fixed rate. However, if prices drop during this time, customers may be stuck with a higher price and could face penalties for leaving early. Ofgem recommends that customers consider moving to a fixed deal for security, but warns them to understand all costs involved. Standing charges, which cover the costs of connecting to gas and electricity supplies, vary slightly by region and are typically around 51.37p per day for electricity and 29.82p per day for gas. Campaigners argue that standing charges are unfair as they make up a bigger proportion of bills for low energy users. In response, Ofgem has proposed introducing two types of price-capped tariffs from winter 2025: one with a standing charge and unit rate, and another without a standing charge but with a higher unit rate. The Household Support Fund has been extended until March 2026 to help vulnerable customers, while the Warm Home Discount scheme is being overhauled. From winter 2025, anyone on means-tested benefits will automatically see £150 taken off their bills. Suppliers must also offer affordable payment plans or repayment holidays for struggling customers.
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