02 Sep 2026
Households are facing renewed pressure on their finances this autumn, as energy bills rise and record levels of debt show that many people are already struggling to keep up.
Ofgem has confirmed that the energy price cap will increase by 4% from 1 October to 31 December 2026. For a typical household paying by direct debit for both gas and electricity, the annualised figure will rise by £60, from £1,663 to £1,723, which is equivalent to around £5 more a month.
The price cap does not limit a household’s total bill. It restricts the unit rates and standing charges suppliers can apply, meaning households using more energy will continue to pay more.
Ofgem says the increase is largely being driven by higher wholesale gas prices. The removal of VAT from domestic electricity bills means electricity costs will remain broadly stable, with households that do not use mains gas expected to see an increase of less than 1% in their capped electricity costs.
However, this does not tell the full story for many rural households.
Homes without a mains gas connection often depend on heating oil or liquefied petroleum gas (LPG). These fuels are not covered by the price cap and must usually be purchased in bulk, leaving households exposed to sudden market movements and large upfront costs.
Action with Communities in Rural England (ACRE) reports that heating oil reached 85p per litre on 26 August, 38% above its pre-war price, after more than doubling during March. ACRE says a typical 1,000-litre order increased in price by £740 in a single week at the height of the surge.
It is calling for further government support for off-grid households, including consideration of temporarily removing the 5% VAT charged on heating oil. ACRE also argues that help must reach low- and middle-income rural households, not only those eligible for the most tightly targeted support.
These pressures come as energy debt reaches unprecedented levels. Figures published by Energy UK suggest domestic energy debt and arrears reached a record £6 billion during the first half of 2026 and could rise to £7 billion by the end of the year without further intervention.
The trade association estimates that more than three million customers are now in debt or arrears, owing an average of around £1,800. Its figures measure payments that remain outstanding after 30 days and therefore differ from Ofgem’s official measure.
Energy UK is calling for coordinated action from government, the regulator and suppliers, including a social discount targeted at households most in need and progress on proposals to provide debt relief.
For rural communities, the figures underline a wider concern: national measures based on mains gas and electricity costs can overlook the very different circumstances facing off-grid households. Poorer energy efficiency in some rural homes, limited access to alternative heating systems and the need to buy fuel in bulk can all add to the pressure.
As colder weather approaches, any further action on energy costs must recognise the different ways households heat their homes. Support should be designed so that everyone facing rising bills can benefit, including rural households that rely on heating oil or LPG and are not protected by the energy price cap.
