Ministers have all but ruled out fresh UK energy bills support before October, when the Ofgem-confirmed price cap will rise by 3.6% for a typical household paying by Direct Debit, from £1,663 to £1,723 per year. (The Ofgem press release URL itself states a 2% increase; MoneySavingExpert, citing Ofgem’s confirmed cap, puts the figure at 3.6%, the £1,723 annual figure is consistent across both sources.)
That rise follows the 13% increase in July, the first cap period to feel the full force of Middle East conflict-driven wholesale gas prices. According to the House of Commons Library, gas unit prices rose 28% and electricity unit prices 6% in that July quarter, with wholesale gas prices having doubled in early March 2026 when the conflict began before falling back but remaining volatile.
The government’s position is best read as: we have done something, we may do more, but not yet. Prime Minister Andy Burnham acknowledged on Wednesday that rising bills were ‘difficult for people and I recognise that,’ but declined to commit to intervention beyond the VAT removal on domestic electricity bills, a measure worth around £45 a year for an average household and announced in his first week in office.
Energy Secretary Miatta Fahnbulleh said bills were ‘being driven up by the Iran war’ and the government would ‘keep looking at what more we can do to protect families from unaffordable bills.’ Chancellor John Healey was similarly non-committal, telling the Sun: ‘No government can stop the squeeze felt by families and businesses with a global shock of this magnitude. It’s being felt around the world. But we can keep close watch as we move towards the new year, and we remain focused on giving families a bit of breathing space with the cost of living.’
The January Risk Is Where UK Energy Bills Support May Be Needed Most
October is manageable. January is the worry. MoneySavingExpert projects (characterising the estimate as ‘crystal ball-gazing’) a further 13% rise from £1,723 to £1,948 per year for the January to March 2027 quarter. That sits close to the up-to-9% rise forecast in the original government briefings from earlier in the year.
Ofgem’s own analysis of the October rise identifies two specific cost drivers: electricity balancing costs adding around £1.23 per month to an average bill, and gas network cost adjustments adding 72 pence per month, the latter partly because improved home energy efficiency means fixed infrastructure costs are now being spread across fewer units of consumption.
Government sources told journalists that any further support would be costed in the budget, with officials watching how the Gulf conflict develops and whether the Strait of Hormuz could be reopened.
A Targeted Scheme, Designed but Not Yet Switched On
The Resolution Foundation’s report, ‘Billing Me Softly’, offers the clearest blueprint for what a January intervention might look like. Its proposed support scheme, costed at £2 billion, would set an income threshold of £24,000 a year, covering around 40% of all households and, crucially, more than 83% of households in the lowest income groups, according to the Foundation’s accompanying press release.
A flat-rate option would pay £175 to all eligible households. A two-tier alternative within the same £2 billion envelope would pay £220 to those earning below £18,000 and £85 to those between £18,000 and £24,000, directing more money to the households with least capacity to absorb the shock.
The Foundation’s chief executive, Ruth Curtice, put it plainly: ‘The rise in energy bills in October has been tempered but not avoided by the government’s decision to reduce electricity bills for everyone through a VAT cut. With wholesale gas prices hitting new post-Iran highs in the past week, there is a real risk of further rises in January. Given the acute pressure on both family and government budgets, we need a better mechanism for targeted support ready to activate if needed.’
For context, even at £1,948 a year the cap would remain well below the £2,500 peak the previous government set during the 2022 crisis, as Ofgem noted when announcing the July rise. That historical comparison does little for families sitting in November wondering whether to turn the heating on, but it does tell us something about the government’s political calculation: the headroom exists to absorb the criticism without writing a cheque.
The Trades Union Congress wants a windfall tax on bank profits to fund relief. General Secretary Paul Nowak said: ‘Banks are raking it in while many up and down the country are struggling to get by, they can well afford to pay more tax.’ It is a clean political message, whatever its fiscal merits. Whether Healey picks up that idea or opts for the Resolution Foundation’s more surgical income-tested route may depend entirely on where the Strait of Hormuz stands come November.
