The energy price cap October 2026 change arrives on Wednesday 1 October, and for most households on a standard variable tariff it means bills go up again. Ofgem has set the new cap at £1,723 a year for a typical home that uses both gas and electricity and pays by Direct Debit. That is £60 a year more than the current level, or about £5 a month.
The headline number hides a more complicated picture. Gas users are carrying almost all of the rise, electricity has been held steady by a temporary cut in VAT, and Ofgem has changed the way it defines a “typical” home, which makes comparisons with past years tricky. Here is what is changing, who is affected, and what you can do about it before the cold weather sets in.
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What is the energy price cap October 2026 figure?
The regulator confirmed on 26 August that the cap will rise by 4% for the period from 1 October to 31 December 2026. According to Ofgem’s announcement, a typical dual-fuel household paying by Direct Debit will see its annual bill move from £1,663 to £1,723, if that level of prices lasted for a full year.
The cap covers England, Scotland and Wales. It applies to people on standard variable, or default, tariffs, which is the tariff you are moved onto when a fixed deal ends and you do not choose a new one. Ofgem estimates there are around 21 million Direct Debit accounts on standard variable tariffs, and around 34 million variable accounts in total when prepayment and other payment types are included.
If you are on a fixed tariff, the October change does not affect you until your fix ends. Around a third of households are on fixed deals, according to Ofgem.
Why the energy price cap is going up
The short answer is gas. Wholesale gas prices have risen on international markets, and the UK is heavily exposed because gas is used both for heating homes and for generating a large share of the country’s electricity.
Neil Kenward, Ofgem’s director general for markets, said that high international gas prices “are continuing to drive energy costs in the UK.” Energy analysts and consumer groups such as MoneySavingExpert have linked the higher wholesale prices to the ongoing conflict in the Middle East, which has unsettled global energy markets.
The cap is recalculated every three months to reflect what suppliers are paying for energy, along with network costs, policy costs and an allowance for supplier profit. When wholesale prices climb, the cap follows a few months later.
Gas users pay most of the rise
This is the part of the October change that many people will miss. The increase is not spread evenly across fuels. Ofgem says gas bills will rise by about 8%, while households that do not use gas will see a rise of less than 1%.
The End Fuel Poverty Coalition calculates that the average gas unit rate will reach around 8p per kilowatt hour from 1 October, up from about 6.29p last winter, an increase of roughly 27% in a year. That makes this the highest gas unit rate since early 2023.
For homes that rely on gas central heating, and that describes most homes in Britain, the rise will be felt most in the coldest months, when heating use peaks. A household that uses more gas than average will see a larger increase than the £60 headline suggests.
The VAT cut on electricity
Electricity prices are being held roughly flat for a specific reason. From 1 October 2026 to 31 March 2027, the government has temporarily removed VAT on domestic electricity in Great Britain, cutting it from 5% to zero.
Ofgem says that without this change, the typical bill would have been around £45 higher. The VAT cut applies automatically. You do not need to apply for it, and suppliers will apply it to fixed tariffs as well as variable ones.
The cut is temporary. Unless the government extends it, VAT on electricity is due to return in April 2027, which could push bills up again at the same time as any other changes to the cap.
Unit rates and standing charges from 1 October
The cap does not set a single bill. It sets the maximum unit rate for each kilowatt hour of energy and the maximum daily standing charge that suppliers can apply on default tariffs.
Ofgem’s breakdown shows that, for customers on a standard variable tariff paying by Direct Debit, electricity will cost on average 26.32p per kWh, with a daily standing charge of 54.83p, averaged across England, Scotland and Wales. These averages hide regional differences, so your exact rates depend on where you live, your meter type and how you pay.
Your supplier should write to you with your personal rates from 1 October. If you have not heard from them, log into your account or check their website.
Prepayment and standard credit customers
The typical annual cost also depends on how you pay. For the October to December period, the figures for a typical household are:
- Direct Debit: £1,723
- Prepayment: £1,678
- Standard credit (paying on receipt of a bill): £1,861
Prepayment customers now pay slightly less than Direct Debit customers on typical use, after changes Ofgem made in recent years to remove the extra cost of prepayment. People who pay by cash or cheque when a bill arrives pay the most, because suppliers are allowed to recover the higher cost of collecting payments this way.
Ofgem’s new “typical use” figures explained
If you have followed the price cap for a while, the new figures may look lower than you expected. That is because Ofgem changed its definition of a typical household in July 2026.
The regulator now assumes a typical home uses 2,500 kWh of electricity and 9,500 kWh of gas a year. Those figures, known as Typical Domestic Consumption Values, are lower than before because households have been using less energy.
Measured on the old definition, the cap would be £1,935 from October, up from £1,862. The underlying prices are the same either way. Only the assumed amount of energy used has changed. When you see different figures quoted in different places, this is usually the reason.
Does the price cap limit your total bill?
No, and this is the most common misunderstanding. The £1,723 figure is not the most you can be charged. It is an illustration based on typical use.
If you live in a larger home, work from home, have an electric vehicle, or use more heating than average, your bill will be higher. If you use less energy, it will be lower. What the cap limits is the price per unit and the daily standing charge.
The best way to understand your own costs is to look at your annual usage in kWh, which your supplier shows on your bills or in your account, and multiply it by the new unit rates.
Should you fix your tariff?
Fixed tariffs lock in your unit rates and standing charges for a set period, often 12 or 24 months. Whether that makes sense depends on how the fixed price compares with where the cap is heading.
Forecasts from analysts suggest the cap is likely to rise again in January 2027 if wholesale gas prices stay high, though nothing is certain until Ofgem announces the next level in late November. If a fixed deal is priced close to or below the current cap, it could protect you from further increases. If it is priced well above the cap, you may pay more than necessary if prices fall back.
Before fixing, check the exit fees, the length of the deal and whether the price includes the same standing charge. Price comparison sites and the MoneySavingExpert price cap guide explain how to judge whether a fix is worth it.
What happens in January 2027?
Ofgem will announce the next cap, covering 1 January to 31 March 2027, towards the end of November. Early forecasts point to another rise, driven mainly by gas prices, but these predictions can change quickly as wholesale markets move.
The January to March period is also when most energy is used, so even a small percentage rise has a bigger effect on real bills than the same rise in summer. If your budget is tight, it is worth planning for the possibility that winter bills will be higher than they are this autumn.
Northern Ireland and the price cap
The Ofgem price cap does not apply in Northern Ireland, which has its own energy market and regulator. Households there are not affected by the October change in the same way, and prices are set differently. The electricity VAT cut announced for Great Britain also relates to Great Britain, so people in Northern Ireland should check with their own supplier about how tax changes affect them.
How the cap compares with 2022
For perspective, bills are far lower than at the height of the energy crisis. Ofgem says prices remain 52%, or £1,859, lower than in 2022, when the government stepped in to limit a typical bill to £2,500 through the Energy Price Guarantee.
That comparison offers little comfort to people who are struggling now. Adjusted for inflation, Ofgem says the new cap is still 7% higher than the same period in 2025. Energy remains a much bigger share of household spending than it was before the crisis began.
How to read your energy bill
Energy bills can be confusing, but four numbers tell you most of what you need to know. The first is your unit rate for each fuel, shown in pence per kWh. The second is your standing charge, the fixed daily amount you pay regardless of use. The third is how many kWh you used during the billing period. The fourth is whether the reading was actual or estimated.
If a reading is marked as estimated, submit a real one. Estimates can be well above or below what you actually used, which leads to large corrections later. Your annual consumption, often shown on the first page of your bill or in your online account, is the most useful figure for comparing tariffs, because it lets you work out what any deal would cost you rather than a typical household.
Check your Direct Debit amount too. Suppliers set it to spread your yearly costs evenly, so it should be based on your real usage and the new prices. If your account is building up a large credit, you can ask for a refund or a lower payment. If it is falling into debt, it is better to increase payments now than face a large bill in spring.
Smart meters and time-of-use tariffs
A smart meter sends readings to your supplier automatically, which ends estimated bills and lets you see your energy use in close to real time on an in-home display or app. Many people find that simply seeing the cost of running the tumble dryer or an electric heater changes their habits.
Smart meters also open the door to time-of-use tariffs, which charge different prices at different times of day. Several suppliers now offer tariffs with cheaper off-peak electricity, often overnight. They can save money for households that can shift heavy electricity use, such as charging an electric car, running a dishwasher or using a heat pump, to cheaper hours.
These tariffs are not right for everyone. If most of your electricity use happens in the early evening peak, a time-of-use deal could cost more. Compare your usage pattern with the tariff’s peak and off-peak rates before switching.
Help if you are struggling with energy bills
If you are worried about paying your energy bills this winter, there is help available, and it is better to ask early than to fall behind.
Start with your supplier. Suppliers are required to work with customers who are struggling, and many offer payment plans, payment breaks or hardship funds. If you have a disability, long-term health condition or are of pensionable age, ask to be added to your supplier’s Priority Services Register, which gives extra support during power cuts and can help with billing.
The Warm Home Discount gives eligible households a one-off discount on their electricity bill over the winter. Check GOV.UK for the current eligibility rules, which have changed in recent years. Pensioners should also check whether they qualify for the Winter Fuel Payment. Citizens Advice can help you work out which support you are entitled to.
Take a meter reading this week
One simple step can save you money. Take a meter reading on or just before 1 October and submit it to your supplier. That way, energy you used in September is charged at the old, lower rates, rather than being estimated and partly billed at the new ones.
Take a photo of your meter with the date visible, in case there is a dispute later. If you have a smart meter, check that it is sending readings correctly, because a meter that has stopped communicating will lead to estimated bills.
Easy ways to save on energy this winter
Small changes add up over a long winter. Turning your thermostat down by one degree, while keeping your home at a safe temperature, can cut heating bills noticeably. Heating only the rooms you use, bleeding radiators, drawing curtains at dusk and fixing draughts around doors and windows all help.
If you have a combi boiler, lowering the flow temperature can improve efficiency without making your home feel colder. The Energy Saving Trust has free guides on this and many other savings.
Older people, babies and people with health conditions need to stay warm. Cutting back on heating should never mean living in a cold home.
Energy price cap October 2026: common questions
What is the energy price cap from 1 October 2026?
For a typical household using gas and electricity and paying by Direct Debit, the cap is £1,723 a year, up from £1,663.
How much will my bill go up?
For a typical household, by about £60 a year, or £5 a month. Homes that use more gas will see a bigger rise, and electricity-only homes will see very little change.
Does the price cap affect fixed tariffs?
No. If you are on a fixed tariff, your rates stay the same until your deal ends. The VAT cut on electricity still applies.
How long does the October price cap last?
From 1 October to 31 December 2026. Ofgem will announce the next cap in late November.
Does the price cap apply in Northern Ireland?
No. The Ofgem cap covers England, Scotland and Wales only.
Submit a meter reading before 1 October, check your new rates when your supplier writes to you, and ask for help early if bills become hard to manage. For more news from A1 Blogs, see our news section and latest stories.
