Ofgem, the UK's energy regulator, is changing the way it calculates the typical household energy bill, a move that will lower the quoted average annual cost for October by £190 compared to previous estimates.
New Calculation Method
Under the current system, the average annual dual-fuel bill was expected to rise to approximately £1,899 in October, around £140 higher than a year earlier, according to forecasts from consultancy Cornwall Insight. However, Ofgem has sharply reduced its assumptions about how much gas and electricity a typical household uses. As a result, the official typical annual bill figure for October will now be quoted at about £1,709.
Reasons for the Change
Ofgem stated that household energy consumption has changed materially in recent years, citing a mix of improved energy efficiency, climatic changes, and behavioural responses to affordability pressures. The regulator acknowledged there is a risk that headline bill figures could be misinterpreted as indicating falling prices, when in reality they reflect less consumption.
Ofgem insisted the move is a technical change designed to improve communications. From 1 July to 30 September 2026, energy prices will increase by 13% for a typical household using electricity and gas and paying by Direct Debit. Customers on fixed-rate tariffs are not affected by changes to the price cap.
Support from Industry
Ofgem said there has been broad support from suppliers and industry groups for updating the calculations. The updated figures were needed because existing assumptions no longer provided the most representative view of typical household usage.
Specific Price Details
For customers on a standard variable tariff paying by Direct Debit, the average electricity price is 26.11 pence per kilowatt hour (kWh) with a daily standing charge of 57.19 pence. For gas, the average price is 7.33 pence per kWh with a daily standing charge of 29.04 pence. These figures are based on averages across England, Scotland, and Wales and include VAT at 5%.
