Energy bills predicted to fall again ahead of winter in boost to households

Hard-pressed families are set for a modest boost to their budgets this winter – with energy bills forecast to drop again in October. Experts at Cornwall Insight predict the Ofgem price cap will fall by a further 1% from October 1, on top of a reduction of 7% from July 1.

In cash terms, this amounts to a saving of an extra £23 on top of the £129 cut already due this month - a total of £152 a year.

It would bring the annual bill for a typical dual-fuel customer down to £1,698 – the lowest level since Russia’s invasion of Ukraine sent energy prices spiralling.

But while the reductions offer some respite, energy analysts and consumer champions warn households are still paying hundreds of pounds more than before the crisis – and must not be lulled into a false sense of security.

Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said: "While any reduction in energy bills is welcome, we must not let small fluctuations in the price cap mask the bigger picture.

"Households are still paying far more for their energy than they were before the pandemic, with the current outlook showing little prospect of a meaningful drop over the next few years."

The October cap is expected to dip to £1,698, down from £1,720 in July. While a modest fall, the forecast marks a reversal from earlier warnings, when international tensions in the Middle East pushed predictions to a peak of £1,777.

Wholesale prices have since cooled, but Dr Lowrey warned the system remains vulnerable to further “price shocks” triggered by global events.

He added: “If we want to bring real stability and affordability to the energy system, we need to continue, and speed up, our transition to homegrown, renewable power… building a more self-sufficient energy system is the only way to help shield consumers from international volatility.”

Switch now – or pay more than you need to

Meanwhile, consumers are being urged not to wait for the cap to fall – with more than ten fixed deals already cheaper than October’s forecast.

Elise Melville, energy expert at Uswitch.com, said: “A predicted 1% fall in the October price cap follows weeks of volatility in wholesale costs linked to the tensions in the Middle East. Remember that these are just predictions, and the real price cap could be higher or lower than this latest forecast.

“Households don’t have to wait to start making savings on their energy bills. There are already more than ten fixed deals on the market cheaper than the predicted October rates.”

The cheapest on the market is Outfox the Market’s two-year fixed deal, costing just £1,575 a year – a saving of £145 compared to the July cap. Even with exit fees of £100 per fuel, switching now could make sense for many.

Still higher than before the crisis

Even after the latest drop, energy bills remain hundreds of pounds higher than the pre-pandemic average – which was closer to £1,100. And despite the Government’s windfall tax on energy giants and pressure to reform the market, there is little sign prices will return to historic norms anytime soon.

Cornwall Insight’s longer-term forecast predicts a slight fall in January 2026, followed by a small rise in April – though geopolitical risks could throw those projections off course.

With summer drawing to a close and colder months ahead, experts say the best way for families to cut costs is to act now and switch to a cheaper deal – before tariffs change or disappear.

Cap Forecast – October 2025 (dual fuel, typical use)

Electricity: £894.61

Gas: £802.93

Total: £1,697.55

(Source: Cornwall Insight)