Energy prices will rise by 4% from October – about £60 a year to £1,723 – for a typical household using electricity and gas and paying by Direct Debit.
It means prices will be at their highest level for three years, under regulator Ofgem’s price cap.
The government has removed VAT from electricity bills from 1 October to 31 March 2027.
As a result, VAT is not included in electricity bills for people covered under the energy price cap between 1 October and 31 December. Households will still pay 5% VAT for gas.
This means that all households that are covered by the energy price cap (on a default tariff) will pay less for their electricity. This also applies to some small businesses.
Some people who use more electricity than gas, or only use electricity, will have a bigger reduction in their bill.
SNP Westminster leader Dave Doogan said: “Energy bills have risen seven times under this Labour government. They are now a whacking £563 higher than the Labour Party promised during the election and, instead of reducing the cost of living, like he pledged, Andy Burnham is presiding over yet another big hike in prices.”
Scotland’s First Minister John Swinney added: “Here in Scotland, our support has saved thousands of households between an estimated £300 and £500 a year. That is evidence of how we are using our limited powers to help where we can by investing in more energy efficient homes, tackling fuel poverty and meeting our ambitious climate change targets.
“The UK Government must show it can match this ambition by providing immediate assistance. Scotland is an energy rich country, so households should not be worrying about their bills – urgent and meaningful action is needed now.
“It is clear to me that we need full control over Scotland’s energy resources so we can bring down bills and help people with the cost of living.”
The Scottish Government estimated there would be around 800,000 fuel poor households in Scotland between July and September this year. That is 31% of all households and an increase of around 110,000 households from estimates for April to June.
Estimates for the new energy price cap period covering October 2026 to January 2027 will be published in due course.
For those struggling with the cost of living, the Scottish Government has put a number of measures in place to help, including support for those in crisis through the Scottish Welfare Fund and the Scottish Emergency Heating Oil Scheme.
Proposals for targeted bill discounts show that 660,000 households in Scotland would see their estimated fuel bills go down by an average of £700.
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