Business & Finance

UK household energy bills projected to rise as long-term price pressures persist

Forecasters expect price caps to increase in October and January, while unpaid customer debt reaches record levels.

Updated Aug 26, 2026 · 10:32 UTC1 reports

The short version

UK energy bills are forecast to rise by nearly 4% in October and a further 9% in January, driven by wholesale market volatility and grid upgrade costs.
Unpaid consumer energy debt has reached £6 billion and is expected to reach £7 billion by the end of the year, adding an estimated £60 to £100 to typical annual bills.
Energy suppliers and charities are pressing Chancellor John Healey to introduce targeted bill discounts and debt relief measures in the upcoming Budget.

Cornwall Insight forecasts household energy prices will increase by nearly 4% in October, followed by a 9% rise in January.[BBC News]
Energy supplier EDF projects that UK energy bills will remain stubbornly high at least through the end of the decade.[BBC News]
According to Ofgem, unpaid energy debt overdue by more than three months has hit a record high, with energy suppliers estimating total unpaid balances at £6 billion.[BBC News]
Typical UK dual-fuel energy bills are approximately 70% higher, or about £600 more annually, than in early 2021.[BBC News]
Industry trade body Energy UK estimates that implementing a targeted discounted energy tariff for vulnerable households would cost £1.9 billion.[BBC News]
The government plans to reduce VAT on electricity bills in October, though the reduction will be offset by an 8% increase in gas prices.[BBC News]

Whether the government will fund Ofgem's proposed debt relief scheme or establish a targeted discount tariff in the upcoming Budget remains undecided.[BBC News]
It is uncertain how potential relief measures would be financed, whether through added costs on customer bills, tax increases, borrowing, or spending cuts.[BBC News]