{
  "id": 3479999,
  "title": "What will the energy cap changes mean for my bills?",
  "url": "https://urgent.news/2026/08/26/what-will-the-energy-cap-changes-mean-for-my-bills",
  "topic": "business",
  "section": "Business",
  "published": "2026-08-26T09:40:38.000Z",
  "source": {
    "name": "BBC News",
    "slug": "bbc-news",
    "url": "https://www.bbc.co.uk/news/articles/cdd29v8mp9jo?at_medium=RSS&at_campaign=rss"
  },
  "original_language": "en",
  "account": "Starting October, typical annual energy bills will increase by £60 to £1,723, according to Ofgem's latest energy price cap. This 4% rise affects millions of households in England, Scotland, and Wales, driven by higher gas costs resulting from the US-Israel war with Iran. The cap determines the maximum amount standard variable tariff customers can be charged per unit of gas and electricity. Around 33 million households are covered, with 7 million paying by standard credit, typically paying when they receive their bill. Most of the increase is due to higher gas prices, which have risen by 8%, leading to a bill increase of less than 1% for non-gas-using households. The government's decision to remove VAT from domestic electricity bills has also impacted the new price cap, resulting in a £45 higher typical annual bill without that cut. Ofgem's director general for markets, Neil Kenward, stated that the price rise for October to December is technically 3.6%, but they round the number, hence the 4% figure is publicized. The typical annual usage figure applies to dual-fuel households on a standard variable tariff who pay by direct debit. However, actual bills depend on the amount of energy used and how it's paid for. Fixed tariff customers are not affected by this increase. The cap sets unit prices for gas and electricity, but household bills depend on the overall energy usage and payment method. Factors like location, property type, energy efficiency, household size, and weather also influence the bill. The cap is based on typical annual household energy use with a single bill settled by direct debit. Ofgem reduced this typical level of energy use in July due to homes cutting back on energy use and improved energy efficiency. The new estimate is 9,500 kWh of gas and 2,500 kWh of electricity annually, leading to an average bill of £1,663 since July 1. Ofgem also controls standing charges, fixed daily fees covering the costs of connecting households to gas and electricity supplies. These charges vary slightly by region and payment method. Between October 1 and December 31, 2026, average standing charges for direct debit customers will be 54.83p per day for electricity and 29.68p per day for gas, a decrease in electricity and largely unchanged gas charge compared to previous periods. Campaigners argue that standing charges are unfair as they make up a larger portion of the bill for low energy households. Ofgem aims to offer low standing charge, higher cost-per-unit energy tariffs to provide customers with more choice and control. Energy standing charge plans could backfire, according to MPs. Submitting a meter reading when the cap changes helps avoid being charged for estimated usage at the wrong rate. Customers with smart meters do not need to submit a reading as their bill is calculated automatically. The next energy price cap will take effect on January 1. Analysts predict domestic energy prices may rise an additional 9% in the new year, causing further concern for households during the coldest months. Ofgem's Neil Kenward stated that the main price cap change for the New Year will come from international gas prices, which could decrease if the conflict in the Gulf is resolved and gas flow through the Strait of Hormuz resumes. However, Kenward added that prices could still increase.",
  "summary": "The regulator Ofgem says the price cap will increase by 4% in October for millions of households.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}