What’s changed: Updated 4 October 2026: the January 2027 forecasts have been revised, to £1,999 from Cornwall Insight and £2,065 from E.ON Next. Full update history.
Educational, not advice. This article explains the energy price cap from 1 October 2026 and the figures around it. It is general information, not personal financial advice. Savvy Investor Guide is not authorised or regulated by the Financial Conduct Authority. Nothing here tells you whether to fix your tariff, switch supplier or stay put.
In short
- From 1 October 2026 the energy price cap is £1,723 a year for a typical household paying by direct debit. That is £60 (about £5 a month) more than July to September.
- Ofgem calls it a 4% rise. The unrounded figure is 3.6%.
- Unit rates from 1 October: electricity 26.32p per kWh with a 54.83p daily standing charge, gas 7.97p per kWh with a 29.68p daily standing charge (GB averages, direct debit).
- Gas is doing the damage. Gas bills rise 8%, while the VAT cut keeps electricity broadly stable. Without that cut the cap would have been around £45 higher.
- The cap limits prices, not your bill. Use more energy and you pay more.
- January 2027 forecasts point higher again: £1,999 from Cornwall Insight (30 September) and £2,065 from E.ON Next (as read on 4 October). Ofgem announces the confirmed figure by 25 November.
Ofgem confirmed the energy price cap for October 2026 on 26 August. It takes effect on 1 October and covers around 22 million households on standard variable (default) tariffs. Here are the new figures, the unit rates and standing charges behind them, why the cap has gone up, what the electricity VAT cut changes, and what the forecasts say about January 2027.
Energy price cap October 2026: the figures
These are Ofgem’s own figures for a household with typical usage, by payment method. The percentage changes are Ofgem’s too.
| Payment method | 1 July to 30 September 2026 | 1 October to 31 December 2026 | Change |
|---|---|---|---|
| Direct Debit | £1,663 | £1,723 | 4% |
| Standard Credit | £1,796 | £1,861 | 4% |
| Prepayment | £1,620 | £1,678 | 4% |
| Economy 7 (Direct Debit) | £1,039 | £1,046 | 1% |
On direct debit the rise is £60 a year, which Ofgem puts at about £5 a month. To one decimal place, £60 on £1,663 is 3.6%, and Ofgem rounds that to 4%. If you see “3.6%” in one headline and “4%” in another, both describe the same change.
Prepayment is the cheapest way to pay under the cap, at £45 a year below direct debit. Standard credit, where you pay on receipt of a bill, is the most expensive.
Energy price cap unit rates and standing charges from 1 October
The £1,723 is an illustration. What the cap actually limits is the price per kWh and the daily standing charge, and those are what your bill is built from. Here are the averages across England, Scotland and Wales for direct debit customers:
| Direct debit, GB average | 1 July to 30 September 2026 | 1 October to 31 December 2026 |
|---|---|---|
| Electricity unit rate | 26.11p per kWh | 26.32p per kWh |
| Electricity standing charge | 57.19p a day | 54.83p a day |
| Gas unit rate | 7.33p per kWh | 7.97p per kWh |
| Gas standing charge | 29.04p a day | 29.68p a day |
Watch the VAT when you compare these columns. The July electricity figures include 5% VAT and the October ones include none, because VAT on domestic electricity is zero from 1 October. Gas includes 5% VAT in both. Ofgem itself notes that costs “cannot be compared directly to previous periods because of this change.” The upshot: the electricity standing charge falls, the electricity unit rate barely moves, and both gas figures go up.
Your own rates depend on where you live and how you pay, since Ofgem sets a cap for each of the 14 GB regions. The Ofgem unit rates and standing charges page lets you look up your region by postcode for direct debit, standard credit and prepayment.
Why the energy price cap is going up in October
The cause is wholesale gas. Ofgem says wholesale prices have risen by 11% over the past three months. It puts that down to the conflict in the Middle East, with volatile global gas markets “remaining the dominant driver of price changes.”
Gas and electricity don’t take the rise equally. Wholesale costs went up for both fuels, but the VAT cut cancels out most of the electricity side. Ofgem’s summary: electricity bills “will remain broadly stable”, gas bills rise by 8%, and households that do not use gas “will see a much smaller increase of less than 1%.” How much your bill changes depends mostly on how much gas you burn.
For scale, Ofgem notes that prices remain 52% below the height of the 2022 energy crisis.
What the electricity VAT cut changes
VAT on domestic electricity falls from 5% to zero from 1 October 2026 to 31 March 2027. Gas stays at 5%. The government announced the cut on 21 July and estimated it would take “around £45 off the yearly Ofgem price cap in October”, and Ofgem’s announcement confirms the October cap would otherwise have been about £45 higher. We covered the package itself in the electricity VAT cut and bus fare cap explained.
Two things are easy to miss. First, the cut applies to fixed tariffs as well as the price cap, and Ofgem says suppliers apply it automatically. Second, it is temporary. The government said any further action “will be taken at the Budget”, and the Chancellor has set the Budget for 28 October 2026. That is the date to watch for whether zero VAT on electricity carries on past March.
How does the energy price cap work?
The name leads people astray every quarter, so here it is in Ofgem’s own words:
It does not limit the cost of your total bill. The more energy you use, the higher your bill will be.
Ofgem
Ofgem resets the cap every three months to track the cost of supplying energy. The headline figure is what a household using a set amount of gas and electricity would pay over a year at the capped rates. Ofgem’s typical household uses 2,500 kWh of electricity and 9,500 kWh of gas a year.
It covers standard variable tariffs in England, Scotland and Wales. It does not cover fixed tariffs: Ofgem says around 35% of households, about 11 million, are on a fix and are unaffected by the rise, though they still get the VAT cut. Northern Ireland sits outside the cap altogether and has its own Utility Regulator.
Why you may still see £1,862 or £1,935 quoted
On 1 July 2026 Ofgem cut its assumption of how much energy a typical household uses, from 2,700 to 2,500 kWh of electricity and from 11,500 to 9,500 kWh of gas, because households are using less. The prices didn’t change, but the headline figure went down, since it now describes a household using less energy.
That leaves two versions of every recent cap. Ofgem’s own reference figures are £1,663 rising to £1,723 on the new assumption, or £1,862 rising to £1,935 on the old one. Both pairs are correct and both show the same rise. The only way to go wrong is to compare a number on one basis with a number on the other, which manufactures a change of about £200 that never happened. Our guide to the July 2026 price cap sets out the switch in more detail.
The change also nudged unit rates up a little. Some costs are fixed in total but recovered per unit, so spreading them across fewer assumed units raises the per-unit charge. Ofgem calls the new consumption figures “a presentational tool” but accepts that suppliers “will need to recover certain costs over fewer units of demand.”
Energy price cap January 2027: the predictions
Ofgem will announce the January to March 2027 cap by 25 November 2026. Until then there are only forecasts. The two we could check against their publishers both point higher, and both have been revised since mid-September:
| Forecaster | Published | January to March 2027 forecast | Change on £1,723 |
|---|---|---|---|
| Cornwall Insight | 30 September 2026 | £1,999 | +£276 (16%) |
| E.ON Next | Read on 4 October 2026 | £2,065 | +£342 |
Both use Ofgem’s current assumptions for a dual fuel household paying by direct debit. They are £66 apart, and we report them side by side rather than averaging them or picking one. Both have moved: Cornwall Insight’s earlier forecast, published on 26 August, was £1,872, and E.ON Next’s page showed £2,131 on 15 September. Cornwall Insight said on 30 September that the wholesale part of the January cap is set over a fixed period, by then nearly halfway through, “making a January increase all but certain.” E.ON Next marks its own January figure as low confidence. E.ON Next is a supplier; Cornwall Insight is an independent analyst.
Both figures are on the current consumption assumptions. A January forecast quoted on the old assumptions would run roughly £200 higher for the same prices, as the section above shows for July and October, so check which basis a headline uses before comparing it with these.
Forecasts for October held up reasonably well. Before the announcement, E.ON Next predicted £1,717 and Cornwall Insight £1,699.59, and the confirmed cap came in at £1,723. Neither is a guarantee for January, but that record is a fair guide to how much weight a forecast can bear.
Ofgem has also scheduled the announcements after that: by 23 February 2027 for April to June, and by 26 May 2027 for July to September.
Other dates to know this winter
- Warm Home Discount. A one-off £150 off the electricity bills of eligible households. The scheme reopens for winter 2026 to 2027 in October, and the gov.uk Warm Home Discount page explains who qualifies.
- 28 October 2026: the Budget. This is where the government has said any further action on bills, including whether the electricity VAT cut continues, will be decided.
- 25 November 2026: the January cap. Ofgem’s deadline for announcing the January to March 2027 level.
- 1 April 2027: a new cost in the cap. In late August Ofgem decided to add an allowance from April 2027 for the Bill Discount Scheme, the government scheme that discounts electricity bills for households near new or upgraded transmission lines. The allowance covers what suppliers pay to run it, and Ofgem has not yet said how much it adds to the cap.
- Low standing charge tariffs. EDF, E.ON, Octopus and British Gas have been piloting tariffs with lower standing charges since June 2026. Customers who opt in “could expect to pay about £150 less per year on standing charges” but face higher unit rates. The pilot is opt-in and has no effect on the cap.
Energy price cap October 2026: FAQ
How much is the energy price cap from October 2026?
£1,723 a year for a typical dual fuel household paying by direct debit, from 1 October to 31 December 2026. Standard credit is £1,861, prepayment £1,678 and Economy 7 on direct debit £1,046.
What is the energy price cap per kWh in October 2026?
On average across England, Scotland and Wales, for direct debit: electricity 26.32p per kWh with a standing charge of 54.83p a day, and gas 7.97p per kWh with a standing charge of 29.68p a day. Your region and payment method change the exact figures.
What percentage is the October 2026 price cap rise?
Ofgem gives it as 4% on direct debit, standard credit and prepayment, and 1% on Economy 7. The unrounded direct debit rise is 3.6%, or £60 a year.
Will the energy price cap go up in January 2027?
The forecasts say yes, though nothing is confirmed. Cornwall Insight forecast £1,999 on 30 September, and E.ON Next’s page showed £2,065 when read on 4 October. Ofgem announces the actual figure by 25 November 2026.
Does the price cap affect me if I am on a fixed tariff?
The cap rise does not change a fixed tariff’s rates. The electricity VAT cut does apply to fixed tariffs, and Ofgem says suppliers apply it automatically.
Is the energy price cap a limit on my total bill?
No. It caps the unit rate and the daily standing charge. Your bill depends on how much energy you actually use, so it can be well above or below £1,723.
Should I fix my energy tariff?
That depends on your own usage and the deals open to you, and this article does not recommend either way. What Ofgem has said is that fixed tariffs “are available at £100 or more below the October price cap.” When comparing, look at the unit rates, the standing charges, any exit fees and the length of the fix, and remember that forecasts for January are not confirmed. Citizens Advice offers free, impartial help with energy bills.
Does the energy price cap apply in Northern Ireland?
No. Northern Ireland has separate electricity and gas markets overseen by its own Utility Regulator.
Information, not advice. This article describes the energy price cap for 1 October to 31 December 2026 as confirmed by Ofgem on 26 August 2026, and reflects sources checked on 17 September 2026. Figures for January 2027 onwards are forecasts published by third parties, not confirmed levels. It is general information and not a personal recommendation about your tariff. Savvy Investor Guide is not authorised or regulated by the Financial Conduct Authority. For free impartial help with energy bills, Citizens Advice is the government-backed consumer service for energy in Great Britain.
Key sources
- Ofgem, Energy price cap will rise by 4% from October 2026, 26 August 2026.
- Ofgem, Energy price cap update from 1 October 2026 (PDF), for the figures by payment method.
- Ofgem, Changes to energy price cap between 1 October and 31 December 2026, including the future announcement dates.
- Ofgem, Energy price cap unit rates and standing charges, with regional figures.
- Ofgem, Energy price cap and standing charges explained.
- gov.uk, electricity VAT cut announcement, 21 July 2026.
- gov.uk, Chancellor’s letter on the Budget 2026 date, 31 July 2026.
- Cornwall Insight, Bills to climb in October with worse to come in January, 26 August 2026.
- Cornwall Insight, 16% price cap rise forecast in January, 30 September 2026.
- E.ON Next, Price cap predictions, as read on 4 October 2026.
- Ofgem, Electricity Bill Discount Scheme cost allowance, decision published August 2026.
- Ofgem, Lower standing charge tariffs: next steps.
- gov.uk, Warm Home Discount Scheme.
Update history: 4 October 2026
Update, 4 October 2026. The January 2027 forecasts in this article have been brought up to date. Cornwall Insight’s release of 30 September 2026 puts the January to March cap at £1,999, up £276 or 16% on October. Its 26 August forecast, which this article carried until today, was £1,872. E.ON Next’s predictions page showed £2,065 for January when read on 4 October, against £2,131 on 15 September. The summary, the forecast table, the FAQ answer and the sources have been changed to match. The October cap figures are Ofgem’s confirmed ones and are unchanged.