Energy bills are set to surge by up to 21% in January as Iran war keeps pushing household costs higher

From the Newshound archive · first published 9 October 2026.

Typical household energy bills rose to £1,723 a year on October 1, and forecasters now warn of a further rise of up to 21% in January 2027 — potentially pushing annual bills to £1,999, the highest level since July 2023. The Strait of Hormuz closure, caused by the war in Iran, is driving up wholesale gas and electricity prices with no clear end in sight. Households on standard variable tariffs, the default for most people, face the full force of each price cap rise.

Martin Lewis warns even fixed-tariff customers can see bills climb if energy use increases or direct debit estimates are revised upward.

Cornwall Insight and energy firms including British Gas, EDF and E.ON all predict a January rise, with the official Ofgem announcement due by 25 November.

Switching to a fixed tariff now is the one way households can lock in current rates and shield themselves from the January hike.