Ofgem energy cap rises as Redditch residents worry about winter heating bills

Ofgem’s energy price cap rose on 1 October 2026 in England, Scotland and Wales, taking the annual figure for a typical household paying by Direct Debit to £1,723. The increase matters to households already struggling with heating costs: residents in Redditch told the BBC they were worried about what they would pay through winter.

The figure is £60 a year, or about £5 a month, higher than in the preceding cap period if that level of energy use continued for a year. It is an illustration based on typical gas and electricity use, rather than a limit on any household’s total bill. How much a household pays depends on its energy use and the rates that apply to it.

Why one Redditch household says £300 a month was not enough to stay warm

Pat Snell told the BBC that she and her husband, John, paid £300 a month for energy on a fixed-price tariff last winter and were still cold. John had had a stroke, she said, and they relied heavily on heating to keep him comfortable. Her account describes their experience; the BBC report did not publish their bills or establish how typical their costs were.

Snell said they kept the temperature at no more than 18C and closed most rooms. Her fixed tariff is due to end in late October, leaving her concerned about bills in December, January and February. The new cap does not immediately raise the rates on an existing fixed tariff, according to Ofgem, although a household approaching the end of a deal may face a different price when choosing what comes next.

What Ofgem’s £1,723 energy cap means for bills

Ofgem says the cap limits the unit rates and standing charges suppliers can charge customers on default tariffs. It covers around 22 million households, according to the regulator, and is reviewed every three months. The £1,723 headline figure is calculated for a typical household using gas and electricity and paying by Direct Debit. It does not mean every covered household will receive a £1,723 bill.

For October to December, Ofgem lists average Direct Debit electricity rates of 26.32p per kilowatt hour and a daily standing charge of 54.83p. The corresponding gas figures are 7.97p per kilowatt hour and 29.68p a day. Rates vary by region and payment method, so those averages cannot be used as a precise estimate for every address.

Around 11 million households, or about 35%, are on fixed tariffs and will not see their agreed rates change immediately because of this cap increase, Ofgem said. That distinction is relevant to Snell’s account: her reported £300 monthly payment was on a fixed deal last winter, rather than a bill calculated under the new default-tariff cap. Her household’s energy use and tariff terms were not established in the BBC report.

Why the October cap rose despite an electricity tax cut

Ofgem attributed the 4% cap increase mainly to higher wholesale gas prices associated with the conflict in the Middle East. It said gas costs were responsible for most of the rise, while electricity bills remained broadly stable after the government removed VAT from domestic electricity. That is the regulator’s explanation of the change, rather than an independent assessment of the wholesale market.

The Department for Energy Security and Net Zero says removing VAT from household electricity from 1 October will save an average of £45 a year, with the amount depending on a household’s electricity price and use. The change also applies to fixed tariffs, it says. Ofgem’s rate information shows electricity VAT at zero from 1 October 2026 to 31 March 2027, while gas remains subject to 5% VAT.

Ofgem says the typical cap figure remains 52% below the peak of the 2022 energy crisis, when the government capped bills at £2,500. That comparison does not resolve the pressure described by residents interviewed in Redditch. Their accounts concern what they can afford after other household costs, as well as the amount charged for energy.

Support and the next price-cap decision

The government says around six million households are eligible for a £150 Warm Home Discount this winter. Eligibility depends on the scheme’s rules, and the BBC report does not establish whether any of the residents it interviewed qualify. The electricity VAT change is applied through suppliers; the department says customers do not need to claim that saving separately.

Caroline Fortune of the energy advice charity Act on Energy told the BBC that households may not yet have felt the full effect of recent price rises because they generally use less energy in summer. She said demand for the charity’s help had increased. Her advice was to review tariffs, check eligibility for support and seek help early if payments might become difficult.

Other residents described different strains on their budgets. Najibullah Rahimi, who said he was seeking work after coming to the UK from Afghanistan with his family about a year ago, told the BBC that utility bills and costs for his children were already difficult to manage. Kelly Birkett, a Redditch accountant who works from home and has two children, said energy costs were restricting what her family could spend on experiences together.

The current cap runs to 31 December. Ofgem reviews it quarterly, so the October figure cannot establish what a household will pay under the next cap period. Nor can the published interviews establish the residents’ eventual winter bills. For now, they show why a typical increase of about £5 a month can matter to people who say they were already limiting their heating.