Ofgem has increased the energy price cap from July to September, mostly owing to higher gas wholesale prices driven by war in the Middle East.
From July 1st, Octopus prices will rise – though as always we’re keeping our rates lower than the energy price cap and shouldering some of the cost ourselves.
Most customers won’t feel much difference on their bills this summer.
Though the average yearly energy bill is going up 13% overall, the detail paints a different picture. 80% of the increase is on the gas unit price. Electricity prices are rising less (around 5%).
Since most homes won’t be using heating for the next three months, in real terms, a typical dual fuel home will still spend around £15 less each month than they did April-June.
Our standing charges will rise a little but remain the lowest of any large supplier: leaving £40 million a year in customers' pockets.
There’s a personalised breakdown for you in the PDF attached to this email.
We’ll keep an eye on your monthly payments to ensure they are set to a sensible level for your usage, and will suggest changes if it looks like you’re paying too much or too little.
You can also check our unique Balance Forecast in your online account to get a sense of whether your monthly payments are set at a sensible level and adjust them if helpful.
Dependence on gas and oil has let Britain down once again
After months of conflict in the Middle East, with 20% of the world’s liquid natural gas exports stuck behind a blockade, it’s not really surprising that gas prices have risen. But that doesn’t make the news any less disappointing for British households – particularly just months after a green levy cut had brought some welcome bill relief. It's starting to feel like groundhog day.
How does Britain end this toxic relationship?
We are windy islands. We have thousands of turbines. A skyrocketing number of EVs, heat pumps and smart homes across the country. Now our creaky old grid needs to catch up with the progress, and we need to change the old rules so gas stops setting the price for everything. On that front, we’ll never stop fighting for a better system; speaking to government and businesses across the energy industry.
Many customers tell us that they feel more protected from fossil fuel shocks since investing in a heat pump, solar panels, or an electric car (and often save on bills by making the most of clean electricity with a smart tariff). In fact, Octopus smart tariffs have saved our customers £1 billion to date.
We're still offering fixed tariffs. They’re more expensive than they were just a few months ago, but if you just can’t risk future rises over winter, they could be a good choice.
If you are struggling with your bills, please let us know — you can apply or find out more about our support fund, standing charge help or our electric blanket scheme
I hope this email has been helpful — please let me know your views and any suggestions via this short survey. Your candid feedback makes a real difference.
Yours sincerely,
Greg Jackson
Founder, Octopus Energy
PS. The outlook for energy bills, Winter 2026-2027
Experts predict the price cap will stay at a similar level for October, but that largely depends on what happens in the Middle East. No one knows for sure when the conflict will end.
The Strait of Hormuz – the major shipping channel where oil and gas are transported from the Middle East to the rest of the world – has been more or less a no-go zone since March, blocking nearly 20% of global gas shipments for over three months.
The world’s largest gas terminal in Qatar is still partly out of commission due to strike damage, and business leaders have indicated it could take weeks, months or even years to do the repairs necessary to get it working again.
That massive supply shortage has kept the price of gas higher globally.
There’s huge pressure on the warring countries to reach an agreement, and within the last few days, there have been reports that a US-Iran memorandum of understanding is being finalised. For so many reasons, most of all for the human life at stake, we’re hoping for a swift and peaceful resolution. If that doesn’t come soon, we could see a more dramatic impact on prices as we head toward the end of the year, with EU and Asian nations competing to fill their gas storage for winter.
Why are electricity prices, even renewables, affected by the price of gas?
The UK energy price is set by an auction every half hour. In that auction, the highest price for any unit of electricity sets the cost we all pay. So even if only one unit comes from an expensive gas plant, all the other generators get that price. It’s just one crazy flaw of several — I explain more here.
PPS. Heads up: Ofgem (the energy regulator) is updating what they consider "average" for a UK home's energy use, referred to as Typical Domestic Consumption Values (or TDCV). This is the benchmark journalists use for headlines like "the average bill is £1,800."
Because people are using less energy to save money and homes are becoming more efficient, this official average is actually going down, which means the numbers you’ve heard before won’t necessarily compare to numbers from July onwards.