Energy price cap rises again as households struggle under weight of historic energy debt

^{27 August 2025}

Today's announcement from Ofgem confirms that the energy price cap will rise by 2% (£35 per year) for a typical household from October. While the rise is small, it underscores the fact that energy costs remain stubbornly high.

With energy debt across the UK now standing at over £4.2 billion, millions of households are still carrying the weight of debt built up during the energy crisis of 2022 - when bills soared to unprecedented levels - and beyond. With repayments ongoing and current costs already stretching budgets, today's increase will intensify this financial strain.

Vikki Brownridge, CEO at StepChange Debt Charity, said:

"There's no doubt that energy bills remain a challenge for our clients, and we've seen a steep increase in energy arrears over the last two years - our latest data shows a 7% rise in average arrears year on year. The fact is that keeping up with payments whilst repaying historic debt is a constant struggle for households on lower incomes, and not something that can be dealt with easily. This has a knock-on effect on people's ability to pay other financial commitments, and risks trapping people in a cycle of debt.

"Ofgem is currently consulting on whether to introduce a debt relief scheme to help struggling households get back on track. Energy debt is the most common type of household arrears we see at StepChange, and a well-designed scheme would be an important step in helping to alleviate some of these pressures. However, energy affordability does remain a problem that needs attention from government, and we urgently want to see a long-term solution to protect consumers from unaffordable energy costs."