Expert predicts when UK energy bills will rise with new £1,737 limit | Personal Finance | Finance

A new predication shows when energy bills will rise and suggests a new limit will be put in place. Cornwall Insight has released its final forecast for the October to December 2025 Default Tariff Cap (price cap), following the closure of the observation window on August 18. 

It says: “The new forecast predicts the cap will rise to £1,737 a year for a typical dual fuel household this winter. This would represent an increase of £17 and 1% from the current price cap which is set at £1,720 per year. Ofgem is scheduled to announce the official cap on August 27.”

Cornwall Insights says the forecast reflects changes it assumes Ofgem will introduce during the cap period.

For example it includes the expansion of the Warm Home Discount scheme for vulnerable households.

This was announced by the Government in June and it will add around £15 to a typical bill.

Dr Craig Lowrey, Principal Consultant at Cornwall Insight, says: “News of higher bills will not be welcomed by households, especially as winter approaches.

“While the added costs behind this forecasted rise are aimed at supporting those most in need, it does mean typical bills will increase despite relatively lower wholesale costs. 

“It’s a reminder that the price cap reflects more than just the market price of energy.”

The price of electricity and gas has been impacted by geopolitical factors, weather patterns, and changes to policy costs.

Richard Neudegg, director of regulation at Uswitch.com comments: “A predicted 1% increase in the October price cap may not seem significant – but it brings into sharp focus that consumers need to get ready for the winter now.

“Most households will use significantly more energy in the colder months, so the October cap rates will dictate the cost of keeping our homes warm as winter starts to bite for those households still on the price cap.

“Bill payers on a standard variable tariff can beat these expected rises and save on bills by switching to a well-priced fixed deal now.

“We are seeing the strongest savings in three months, around £298 for the average household.”

A Department for Energy Security & Net Zero spokesperson said: “The only way to bring down energy bills for good is with the government’s clean energy superpower mission, which will get the UK off the rollercoaster of fossil fuel prices and onto clean, homegrown power that we control.