Energy bills are rising by £60 a year - here's how you can bring that down

An important development from the financial markets: Energy bills are rising by £60 a year - here's how you can bring that downImage source, Getty ImagesImage caption, Keeping yourself warm by wearing thick clothes, using blankets and having hot drinks can help reduce heating billsPublished27 August 2025Updated 1 October 2026Energy prices have now risen by nearly 4%, with forecasts of a much bigger jump to come in January. It means a rise of about £60 per year – or £5 per month – taking an annual bill to £1,723 for the typical household using both electricity and gas. Regulator Ofgem's price cap affects about 20 million households in England, Scotland and Wales and sets a maximum price for each unit of gas and electricity.

Further increases are likel in January, with forecasters predicting a 16% increase, due to high wholesale prices paid by suppliers as a result of the conflict in the Middle East. While that's beyond your control, here are four things you can do to help keep a check on rising bills. Consider switching to a fixed rateThe energy regulator, Ofgem, is advising people to consider fixing - so that the price you are charged per unit of gas or electricity does not change every three months, although the total bill will still vary depending on how much energy you use.

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The trouble is that it is very difficult to work out whether a fixed deal is a good deal at the moment. Should energy prices rise sharply, then those who have fixed already have the certainty of what they will pay for each unit of energy. That price may well be lower than the forecast price in January.

However, if events in the Gulf region settle down, and a peace deal in the Iran war leads to lower international gas prices, then a longer-term fix might not seem such good value compared with the price cap. So consumer group Which? also recommends keeping an eye on any exit fees when picking a fixed deal.

If variable prices fall below your fixed rate and you want to get out of it before the end of your agreement period, you may have to pay a hefty sum. Before you fix, consumer website MoneySavingExpert advises you look at all the deals available, not just what your own supplier is offering. Pay by direct debitOfgem says about five million people still pay their bill when it arrives every three months.

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For some that's because they do not want their supplier to estimate their usage in case they are overcharged. Taking regular meter readings, or having a smart meter, while paying by monthly direct debit solves that problem. Moreover, paying by direct debit costs less per unit than by so-called standard credit.

You will usually - although not always - need to switch to direct debit if you want to take advantage of the fixed deals on offer. Customers on prepayment schemes - usually people on low incomes struggling to pay bills - used to pay a higher rate than others, but now they pay slightly less than the capped direct debit variable rate.

Economists are analysing what the news means for the markets.