The typical household energy bill will hit £3,549 a year from 1 October, regulator Ofgem announces
Chancellor Nadhim Zahawi says "we should all look at our energy consumption", while outgoing PM Boris Johnson says extra help will be announced in September
Labour leader Sir Keir Starmer says the government is "missing in action" during the cost-of-living crisis
The cap is currently £1,971 for the average household and limits how much providers can charge customers in England, Scotland and Wales
The price of electricity will rise on average from 28p per kWh to 52p in October-December and gas will go up from 7p to 15p per kWh
Energy prices have risen sharply, fuelled by the war in Ukraine, and add to a wider cost of living crisis in the UK
We're going to leave our live coverage here for today - you can find all the key details in our main story here.
Today’s live page was written by George Wright, Catherine Evans, Emily McGarvey, Sam Hancock, Aoife Walsh, and Jen Meierhans.
It was edited by Alexandra Fouché, Andrew Humphrey, James FitzGerald and Dulcie Lee.
Image source, Getty ImagesWe're going to be wrapping up our live coverage shortly. Let's look at the day's key developments:
Remember, the energy price cap isn't a cap on your bill - it's a cap on what can be charged per unit of energy.
In the meantime, check out four discounts and payments that could help you with the cost of living here.
Today's news may feel overwhelming and it can be hard to know where to start - so here are some tips and tricks we hope can help with the rising cost of living.
Food
As we reported earlier, BBC Food has pulled together this list of £1-a-portion dinners to help feed families and friends for less.
Petrol
Making fewer journeys is the most obvious way to save money on petrol, but how else can you use less fuel? Here are five popular tips from drivers - and a look at whether they really work.
Energy habits
The Energy Saving Trust says making several small changes to energy habits, external could help reduce bills, such as limiting your shower time and air drying your clothes. Take a look at more tips below:
Image source, .Houses
There a lots of ways you can make your home more energy efficient, from DIY draft excluders on your windows to insulating your loft hatch. Read more on this here.
Paying bills
If you're struggling to afford your gas and electricity bills, Citizens Advice recommends contacting your supplier directly and offering to come up with a payment plan, external.
For more information, head here.
Helen Catt
Political correspondent
The significant rise in the energy price cap has increased pressure on the government to outline how it plans to help struggling households.
Chancellor Nadhim Zahawi promised more help was on the way, but said we should all look at our energy consumption.
Outgoing Prime Minister Boris Johnson said the help which had already been announced was clearly now going to be augmented - but it'll be up to his successor to decide exactly how.
Conservative leadership contender Rishi Sunak repeated his plan to cut VAT from energy bills and give as yet unspecified help to pensioners and the most vulnerable.
His rival Liz Truss said she would ensure that people got the support they needed - but again gave no further detail beyond her plan to cut taxes and suspend green levies.
Meanwhile, the Labour leader Sir Keir Starmer accused the government of being missing in action, which he described as unforgiveable.
Faarea Masud
Business reporter
Image source, Gary MasonFather-of-four Gary Mason from Derbyshire says he will be switching off his heating this winter to avoid rising bills.
"We will all be gathering around the log fire watching telly together, rather than being scattered around the house, to stay warm," he says.
"This does feel like a Dickensian, retrograde step. I remember the power cuts in the 70s... it feels like we are going through something similar."
He's minimised energy usage in almost all areas of family life.
"We've bought a small barbeque, we've now got an air fryer and a slow cooker - as the oven consumes so much electricity. I've cancelled our Sky TV subscription, I don't go to watch the football anymore, and I've asked the kids to keep Xbox time to one hour a day.
"As a well-paid man, I expect to do nice things - but that's being eroded. This problem affects not only the poorest, but also large families. The whole country must be feeling so demoralised."
Image source, Getty ImagesPeople are facing higher prices on many fronts at the moment, as the cost of living crisis continues to bite.
We've taken a closer look at food prices: why are they rising and what can be done to change the system?
Find out in our 10-minute film on BBC iPlayer.
Some energy companies have been outlining plans to help their customers as bills continue to climb - let's take a look at what we know:
British Gas is offering to donate 10% of its profits to a support fund for its poorest customers.
The firm, which has seen large profits this year, said this meant thousands of households would get grants of £250-£750. But sceptics say it represents only a tiny fraction of the overall cost to households.
At National Grid ESO, plans to enable households to get discounts on electricity bills if they cut use at peak times are set to be announced in the next two weeks.
The scheme would allow people to save cash if they avoid high-power activities, such as cooking or using washing machines, when demand is high.
Elsewhere, the boss of Octopus Energy said this week UK households could not carry the cost of Russia’s war with Ukraine, which has gone some way to increasing the cost of gas and therefore energy bills.
Asked what the solution could be, he told the BBC the government "could double the existing support package".
Image source, NickyNicky, a hairdresser in Ipswich, says it's "unrealistic" for her to pay her energy bill this winter.
Speaking to BBC Radio 5 Live, she says she "can't do any more" to save money.
"I'm good at budgeting, and cutting back, and scrimping and saving. I've been like that most of my life. But now I'm getting to the stage [where] I feel drained," she says.
"Going into work, I know I'm standing there working and it's not going to be enough to cover what I've got to pay out.
"I just don't know where the government think I'm going to magic the money from."
To make sure your bill is accurate, take a reading from your gas and electricity meter and send it to your supplier.
Direct debits are usually based on your estimated energy use for the year and your supplier may be able to reduce your payments if its estimate is higher than the amount you are actually using.
If you're struggling to afford your gas and electricity bills, Citizens Advice recommends contacting your supplier directly and offering to come up with a payment plan, external.
If you're on a prepayment meter and you can't afford to top up, you can get temporary credit from your supplier, external, but you'll have to pay this back.
You may also be able to repay your debt directly from your benefits through the Fuel Direct Scheme, external.
For more information, head here.
Rebecca Wearn
BBC Business reporter
Soaring energy prices are making mum-of-two Cheryl Holmes feel like her dreams are on hold.
“I feel like I’ve done all the right things; I got out of debt, I’ve got a decent job, I’ve minimised impulse spends. But still at the end of the month there’s not much left.”
Cheryl lives in Castleford, a few miles East of Wakefield. She had been saving carefully to buy a home for her family with her husband. But with higher bills, groceries and petrol, it feels impossible.
But it’s not just the big things: “There are a lot of things I want to be doing with my kids, like trips out or for their hobbies, but I have to focus on the essentials, I’m having to be strategic all the time.”
Cheryl is staying calm and says she will work out how to cope this winter: “But I worry about others, those on lower incomes,” she adds.
Image source, Getty ImagesIf you're just joining today's live coverage following the announcement of an increase in the energy price cap here's a summary of the key announcements:
Kevin Peachey
Personal finance correspondent
You may be wondering why you are already paying what seems like a lot more than everyone else on your annual energy bill.
That’s because Ofgem does not cap the total bill.
Instead, the cap works by placing a limit on the price of each unit of gas and electricity, as well as the standing charge.
The regulator illustrates the cap by calculating an annual bill for a household using a typical amount of energy.
So, if you use a lot of gas - perhaps you are at home a lot, and the property is poorly insulated - then the total bill will be higher.
If you only use a little, then your bill will be lower.
Emily McGarvey
BBC News Live, reporting from Ipswich
"Use it or lose it" is a common theme amongst independent businesses here in Ipswich.
For two friends Pasquale Iachetta and Glaudio di Franco who opened Primo hair lounge three years ago, the loyalty of the locals in the town has kept their business running despite the soaring cost of living.
Glaudio, however, says the UK government needs to cap business energy bills at a certain price, similar to the way certain European countries do.
“If our customers feel the pinch they’ll start pushing their appointments out from six weeks to 18 weeks,” he says.
“The circle of money is not getting put around and people are too scared to spend money, where the reality is to stay afloat you’ve got to spend money.
“It’s very unsustainable. Everything has a knock on effect.”
He says the cost of salon products has gone up as well as electricity, which has “a massive impact”.
Pasquale adds: “The government are helping houses but they’re not helping out businesses. Businesses could do with an extra helping hand.”
If you’re worried about rising energy bills, then you’re not alone.
In this video, BBC consumer affairs correspondent Colletta Smith tells you - in a minute - about four payments that could help you.
Reality Check
Image source, PA MediaBoth Liz Truss and Rishi Sunak said they would provide families and businesses with more help with energy bills this winter, but they have not unveiled the full details of their plans.
So far Truss, the frontrunner, pledged she would temporarily suspend green levies on energy bills. Scrapping the green levies would knock off £152 from the typical bill of £3,549.
She also said her other planned tax cuts - scrapping April's National Insurance rise and cancelling a planned corporation tax rise – would help families and businesses meet rising energy costs.
Sunak promised to cut the rate of VAT on domestic fuel bills from 5% to zero for one year from October. This would save £169 on the £3,549 bill.
He also promised an energy efficiency programme for households and to provide more assistance to those on the lowest incomes and pensioners but hasn’t unveiled any details.
James Cheyne
Reporting from Dumbarton
Every Friday morning, the Cutty Sark Community Centre in Dumbarton hosts a lively game of bingo. Its participants are all women and of a generation who do household budgets with quick maths, using pen and paper to work out bills, shopping, rent.
As scribbled calculations fill the notepad in front of us, they show me how it’s becoming more and more difficult to make the sums add up.
Margaret pays a fixed £25 per week towards her utilities, and until recently it’s been more than enough.
“Normally when the bills were coming in before all this carry on, I could maybe be £80 or £90 in credit,” she tells me. But then an extra demand for £112 came through the letter box.
“I was quite shocked, scunnered," she says.
“You’re living on a pension and you’re having to worry about that coming through your door, especially when you already pay every week.”
Elizabeth’s bills have risen from £98 per month to £179, squeezing her pension too:
“I’ve just got to pay them, there’s nothing else for it,” she says with a mixture of strength and resignation.
“I was brought up to pay everything as I got it. If I don’t have the money, I don’t get it. And that’s all there is to it.”
Iona Bain
Broadcaster and financial journalist
Ian wants to know why the Bank of England is raising interest rates when people are struggling enough with various price increases.
The Bank of England, along with most other major central banks, is raising interest rates to try and fight inflation. The theory is that if you make borrowing money more expensive, you reduce demand within the economy because people and businesses will spend less. As demand falls, businesses will have to reduce their prices, which ultimately helps to bring down inflation.
However, there are no guarantees this will work quickly (if it does at all). When the cost of basics like energy and food are rising so drastically, there is a limit to how much households can cut back their spending and usage.
There are also several risks involved, namely that you make borrowing more expensive at a time when people may need affordable credit to survive, that you create a recession that’s more damaging than necessary and that you stifle growth without slowing inflation – leading to the dreaded phenomenon of stagflation.
Only time will tell whether the Bank of England have acted soon enough and in the right way. In the meantime, households need to do what they can to pay down expensive debts and find the best fixed-rate deal for their mortgage because when it comes to rates, the only way is up.
Hannah Mullane
Reporter, BBC Radio 4's Money Box
Anne Southgate is one of the four million households in the UK on a pre-payment meter; for her, today's news is very stressful.
The 38-year-old from Manchester says the thought of her bills rising by so much this winter is taking its toll on her mental health.
“I have to keep fighting back the tears, I don’t want the children to see that," she says.
Anne is a single mum and full-time student; she’s taken on a part-time job to try and make ends meet.
She’s already making lots of cutbacks and doesn’t see what more she can do to bring the cost of her bills down.
"We’re going to have to spend more time together in one room, I don’t really know what more I can physically do.”
Iona Bain
Broadcaster and financial journalist
Matthew Hunter says he's confused about what today's announcement means for those on pre-payment meters. He says he's read that the cost increase is £59 a year, compared to the 80% for a "typical bill". Is the % increase for the pre-payment cap much lower?
I’m sorry to say, Matthew, that the £59 refers to the difference between the regular price cap and the pre-payment price cap. That means the pre-payment price cap is £3,608 as opposed to £3,549.
Customers on pre-payment meters have long had to pay over the odds for their energy usage. This winter will be particularly hard on them. If you can’t afford to top up your meter, you might be able to get a fuel voucher either from your council or local Citizens Advice.
Speak to your supplier as soon as possible to ensure they understand your situation and if need be, offer you emergency credit.
If you’re already in energy debt, you may be entitled to a grant for your energy supplier to help pay off your debts and vulnerable folks can be asked to put on the Priority Service Register to ensure they get extra consideration over the coming months.
Energy suppliers are coming under lots of pressure from debt charities to ensure that their payments plans for customers on prepayment meters are realistic. Let’s watch this space.
Iona Bain
Broadcaster and financial journalist
Judy Power, from Staffordshire, wants to know if customers who've signed up to a two-year fixed price tariff with their energy supplier will see their bills increase after Ofgem's announcement today.
Anyone on an existing fixed rate tariff will not see their bills rise until that deal ends. But as soon as it does, expect to be shifted onto a variable rate tariff, which is pegged to the price cap.
In other words, if you’re not paying higher energy bills now, soon enough you will be.
Once your deal ends, you only have two options, and neither of them are great. You can either stick to the price cap and hope that it falls sooner rather than later or pay a massive premium for a new fixed rate tariff from your existing supplier.
The one advantage of the second option is that you would have certainty about how much your bills would cost. But even if you can afford the enormous mark up, you would be gambling on the possibility that energy prices won’t come down over the term of that tariff.
The best thing to do is to keep an eye on energy price cap predictions and whether they lead to more reasonable fixed tariffs coming through. If so, you may have to snap them up quick.