Cornwall Insight, an energy sector consultancy, predicted on 19 August 2024 that the October price cap level will rise for a typical household, ahead of winter when energy use is higher1. Its estimate put the cap at £1,714 per year for the typical dual fuel home, around 10 per cent or £150 higher than the level in force for July to September 20242. Ofgem was due to release the actual price cap level for 1 October to 31 December 2024 at 7am on Friday 23 August1.
The forecast sits alongside other pressures on household finances. National Energy Action said the increase comes as hundreds of thousands of pensioners now miss out on the Winter Fuel Payment, after changes mean only those on means-tested benefits can claim, and as energy debt is at record levels, with customers owing over £3 billion1. The Energy and Climate Intelligence Unit said bills under the price cap this winter are estimated to be 50 per cent higher, or around £550, than the pre-crisis average taken between 2018 and 20212.
"If these alarming estimates are confirmed by Ofgem on Friday, energy bills and energy debt will stretch household finances beyond breaking point."
"Come winter, bills will be 50% higher than they were pre-crisis on average, due to the lingering effects of high gas prices and our dependence on the fuel for home heating and electricity generation."
The two organisations frame the cause differently. The Energy and Climate Intelligence Unit attributed the level to the lingering effects of high gas prices and UK dependence on gas for home heating and electricity generation, adding that a lack of progress on energy efficiency and heat pumps means reliance on gas has not fallen much in recent years, and that oil and gas from the North Sea is sold on international markets to the highest bidder so does not help with bills or energy independence2. National Energy Action focused on the withdrawal of support and record debt, calling for the UK government and Ofgem to act urgently to directly reduce customer debt levels and energy prices for those most in need1.
| Measure | Figure |
|---|---|
| Cornwall Insight estimate, typical dual fuel home | £1,714 per year2 |
| Change against Q3 2024 | Around 10 per cent, or £150 higher2 |
| Winter bills against 2018 to 2021 average | 50 per cent higher, around £5502 |
| Customer energy debt | Over £3 billion1 |
Why it matters for households
The price cap sets the maximum a supplier can charge per unit of gas and electricity, and the standing charge, for households on a default tariff. The £1,714 figure is not a cap on what any individual household pays: it describes what a typical dual fuel household using average amounts would pay across a year, so a home that uses more gas and electricity in winter pays more than that, and one that uses less pays less. The typical household figure is a modelled average, not a bill.
For a household, a higher cap from October means the cost of each unit of gas and electricity rises just as heating demand climbs. Because the cap tracks wholesale prices with a lag, the change reflects gas and electricity bought in the preceding months rather than anything the household did. The wholesale prices behind the cap are set in international markets, which is why the Energy and Climate Intelligence Unit links the level to dependence on imported gas rather than to North Sea production2. Homes that have cut demand through insulation, heating controls or on-site generation are less exposed to each successive cap level, because a lower volume of units offsets a higher unit price. The relationship between bills and imported fuel is set out in energy bills and energy independence.
The cap applies in Great Britain. Northern Ireland has a separate regime, covered in price cap coverage in Northern Ireland. Households in debt can approach their supplier for a repayment plan, and charitable support exists, including the British Gas Energy Trust.
What happens next
Ofgem was expected to announce the actual price cap level for 1 October to 31 December 2024 at 7am on 23 August 20242. National Energy Action said it would publish a quote and figures showing the number of UK households in fuel poverty on the evening of Thursday 22 August, under embargo until Ofgem confirmed the cap on Friday1. The confirmed level, once published, will replace the Cornwall Insight estimate. The Energy and Climate Intelligence Unit noted that the new Government has made steps on renewables but has not confirmed its plans for home heating or insulation2.