London Daily

Focus on the big picture.
Wednesday, Oct 21, 2026

Why are gas bills so high and what's the energy price cap?

Why are gas bills so high and what's the energy price cap?

Electricity and gas bills for a typical household will go up by £693 a year in April, a 54% increase.

The government says financial support will help cover some of the rise.

How much will my energy bill go up?


Around 18 million households on standard tariffs will see an average increase of £693 - from £1,277 to £1,971 per year.

Around 4.5 million prepayment customers will see an average increase of £708 - from £1,309 to £2,017.

The amount your bill will go up depends on how much energy you use.

Energy bills won't rise immediately for customers on fixed rates, but many are likely to see a significant increase when their deal ends.

What is the energy price cap?


Bills are going up because the energy price cap - the maximum price suppliers in England, Wales and Scotland can charge households - is being raised.

Energy firms can increase bills by 54% when the new cap is introduced in April.

Prices are expected to rise again in October.


What help can people get?


The government says it will offer extra help worth a total of £350 - just over half the increase facing a typical household:

*  April: People in council tax bands A to D in England will receive a one-off £150 discount. This will apply to about 80% of homes

*  October: Customers in England, Scotland and Wales will receive a £200 rebate on their energy bills. They will have to repay this at £40 a year for five years, starting in April 2023

In England local authorities will also have access to a £150m fund to help lower income households living in higher council tax properties. It will also help households in bands A to D who already don't pay council tax.

The warm house discount scheme will be expanded, to cover three million households. It offers low income households a one-off annual discount on their electricity bill, and was worth £140 in 2021/22.

Because the council tax measures only apply in England, £565m will be given to other UK nations to fund equivalent help.

The Northern Ireland energy market is separate, but the government said £150m would be available to support households there.

The government ruled out scrapping the 5% VAT rate on household heating bills, as it said this would disproportionately help wealthier households.


How do energy prices affect the cost of living?


More households are expected to find themselves facing fuel poverty - meaning they spend a disproportionate amount of their income on energy.

The way fuel poverty is measured varies around the UK.

In Scotland, a household is in fuel poverty if more than 10% of its income is spent on fuel and its remaining income isn't enough to maintain an adequate standard of living.

Based on this measure, the Resolution Foundation think tank expects the number of homes facing "fuel stress" across the UK to treble to 6.3 million after April. It says pensioners and people in local authority housing will be hit hardest.

It warns UK households are facing a "cost of living catastrophe".

Food prices are also rising, and an increase in National Insurance in April will leave millions facing higher tax bills.

The Bank of England has put up interest rates for the second time in three months to try and slow price rises.

Why have gas prices gone up?


A worldwide squeeze on energy supplies has pushed the price of gas prices up to unprecedented levels:

*  a cold winter in Europe in 2020/21 put pressure on supplies and reduced the the amount of gas stored

*  a relatively windless summer in 2021 made it difficult to generate wind energy

*  increased demand from Asia - especially China - put pressure on liquefied natural gas supplies

The UK is relatively hard-hit because about 85% of homes have gas central heating, and gas generates a third of the country's electricity.


Why have energy firms collapsed?


When wholesale gas prices spiked, many energy suppliers collapsed - affecting millions of households.

This is largely because the energy price cap prevented them passing on all of their increased costs to customers.

When their supplier went bust many households were switched to a more expensive deal with another supplier.


How can I protect myself from rising prices?


In the past, consumers have been encouraged to shop around when bills rise.

But at the moment better offers - especially fixed deals - are not available.

People already on fixed deals are advised to stay put.

Other households are being encouraged to improve the energy efficiency of their homes.

The Energy Saving Trust says simple changes to our homes and habits could offset the current price rises.


Newsletter

Related Articles

0:00
0:00
Close
Housebuilding Across Scotland Plummets to Eleven-Year Low Despite Government Pledges to Tackle National Housing Emergency
Greggs Announces Factory Closures Across Northern England and Scotland Affecting Seven Hundred Forty Jobs
United Kingdom and Singapore Conclude Eleventh Financial Dialogue in Singapore to Deepen Cooperation on Digital Finance and Capital Markets
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs to Gas Bills and Tap Windfall Profits to Lower Consumer Prices
British Broadcasting Corporation Announces Major Cost-Cutting Overhaul to Close Linear Broadcast Services for Television Channels BBC Three and BBC Scotland Alongside Digital Radio Station BBC Radio Four Extra
London Capital Markets Face Renewed Scrutiny After High-Profile Offerings Underperform Post-Listing
Green Party Wins Historic First Westminster Parliamentary By-Election in Gorton and Denton
Environment Secretary Emma Reynolds Unveils Sweeping Regulatory Overhaul for English Water Industry
United Kingdom Health Security Agency Confirms Thirty-Four Cases in Kent Meningitis Outbreak
Ministry of Defence Prepares Heat Pump Subsidy Cuts to Fund Urgent Military Modernization
British and European Union Officials Schedule Long-Awaited Bilateral Leaders Summit for November Twentieth
Bank of England Governor Andrew Bailey Urges Strict Fiscal Credibility to Protect British Bond Markets
United Kingdom Inflation Rises to Three Point One Percent Driven by Escalating Fuel Costs
Profit Warnings Among London-Listed Companies Reach Two-Year High Amid Global Energy Shocks
Chancellor John Healey Signals Targeted Tax Changes on Banks and London Corporate Offices Ahead of Budget
British Government Reallocates Twenty-Five Per Cent of International Climate Finance to Global Biodiversity Projects
Initial British Carbon Border Taxes Set to Undercut Parallel European Union Tariffs on Industrial Imports
Whitehall Prepares National Zero-Interest Loan Initiative to Accelerate Domestic Heat Pump and Solar Adoption
European Union Offers British Automakers Access to Hybrid Vehicle Trade Protections Subject to Strict Regulatory Alignment
British Probation Officers Threaten Widespread Industrial Action After Rejecting Five Per Cent Government Pay Offer
Microsoft Abandons Major British Artificial Intelligence Data Centre Citing Severe National Grid Power Constraints
United Kingdom Inflation Accelerates to Three Point Four Per Cent Ahead of Chancellor John Healey's Inaugural Autumn Budget
Surging Cloned Number Plates Severely Complicate Traffic Enforcement and Police Investigations
Mounting Opposition Challenges Planned Rollout of Autonomous Taxis Across London
Influential Think Tank Urges Rejoining European Union to Navigate Geopolitical Crises
Government Review Recommends Slashing Benefits to Fund Youth Employment Initiatives
Senior Minister Shabana Mahmood Seeks New Law Enforcement Pact With European Union
Airbus Executive Warns Britain Risks Losing Crucial Role in European Space Industry
Exorbitant Electricity Costs Push British Steelmakers to Worst Competitive Position in Three Years
British Food and Beverage Exports to European Union Collapse by Over a Third Since Brexit
Up to Twenty English Maternity Units Face Impending Closure Due to Safety and Staffing Crises
Government Declares Severe Drought Across Southern England Following Record Dry Spell
Corporate Profit Warnings Reach Two-Year High Amid Middle East Conflict and Rising Costs
International Monetary Fund Warns Chancellor John Healey Against Proposed Bank Tax Raid
Northern Ireland Secures Favorable Agricultural Export Agreement with European Union
Scottish Government Approves Major Offshore Floating Wind Farm Near Aberdeenshire
High Speed Two Rail Project Faces Three Billion Pound Cost Escalation on Initial Phase
National Health Service Warns of Winter Capacity Crisis Across English Hospitals
Tata Steel Confirms Two Thousand Job Cuts at Port Talbot to Fund Green Transition
Global Microchip Developer Announces Three Billion Pound Semiconductor Plant in Cambridge
United Kingdom Artificial Intelligence Safety Institute Proposes Mandatory Licensing for Generative Models
United Kingdom Commits Additional Long-Range Weapons and Air Defenses to Ukraine
British Chancellor Overhauls Infrastructure Financing to Bypass Borrowing Constraints
Bank of England Holds Benchmark Interest Rate at Four Point Five Percent
First Minister Rhun ap Iorwerth Confirms Constitutional Discussions Over Welsh Independence During Initial Bilateral Call with Prime Minister
Labour Party Instructs Local Council Groups to Sever Power-Sharing Accords with Green Party Over New Controversial Policy Positions
Institute for Fiscal Studies Warns of Thirty-Five Billion Pound Fiscal Gap Ahead of Chancellor John Healey Upcoming Autumn Budget
House of Lords Backs Landmark Legislative Amendment to Decriminalize Abortion Across England and Wales
United Kingdom Defence Secretary Wes Streeting Travels to Pentagon for High-Level Strategic Talks Amid Escalating Tensions Over Ukraine and United States Policy Shifts
Bank of England and International Monetary Fund Officials Issue Urgent Warnings Regarding Potential Artificial Intelligence Financial Market Shocks
×