October 2026 Energy Price Cap: What It Means for Your Energy Bill
The energy price cap increased on 1 October 2026, but this does not mean every household will receive a bill for the headline amount.
Ofgem increased the price cap for a typical household paying by Direct Debit by 4%. The illustrative annual figure rose from £1,663 to £1,723. This represents an increase of around £60 a year, or approximately £5 a month, if the new rates remained in place for a full year.
The current cap applies from 1 October to 31 December 2026. Ofgem reviews the price cap every three months, and the rates could rise or fall again from January 2027.
What are the new energy price cap rates?
Between 1 October and 31 December 2026, the average capped rates for households paying by Direct Debit in England, Scotland and Wales are:
Electricity: 26.32p per kWh
Electricity standing charge: 54.83p per day
Gas: 7.97p per kWh
Gas standing charge: 29.68p per day
These are national averages. The rates charged to your household can vary depending on where you live, how you pay and the type of meter you have.
You can check the current regional figures on the Ofgem energy price cap page.
The price cap is not a maximum bill
The £1,723 figure is not a limit on the amount a household can be charged. It is an illustration based on the energy use of a typical dual-fuel household.
The price cap limits the unit rates and standing charges that suppliers can apply to default tariffs. Your actual bill still depends on how much gas and electricity you use.
A household using more energy than the typical amount could pay considerably more than £1,723. A household using less could pay less. This is why checking the price per kilowatt hour is more useful than treating the headline figure as a fixed bill.
Standing charges also apply every day, even if you use little or no energy.
Ofgem updated its Typical Domestic Consumption Values in July 2026 after finding that households were using less energy than under the previous benchmark. These figures are used to illustrate the price cap, but they do not change the amount of energy an individual household actually uses.
Who is affected by the October price cap?
The October price-cap change mainly affects households on standard variable or default tariffs. The protection covers customers paying by:
Direct Debit
Standard credit
Prepayment meter
Economy 7
Ofgem says the cap protects around 22 million households on default tariffs.
If you are on a fixed tariff, the change to the price cap will not normally alter the unit rates agreed under your contract. However, the temporary removal of VAT from domestic electricity does apply to fixed tariffs, with suppliers expected to apply the reduction automatically.
Around 11 million households were on fixed tariffs when Ofgem announced the October cap.
Why has the price cap increased?
Ofgem says the main reason for the increase is higher wholesale gas prices associated with continuing conflict in the Middle East and volatility in global gas markets.
Wholesale prices rose by 11% during the three months before Ofgem announced the October cap. Because gas prices affect both household gas and some electricity-generation costs, international market changes can influence bills in Great Britain.
Most of the October increase is being driven by gas. Ofgem says the gas portion of a typical bill has risen by around 8%, while electricity costs remain broadly stable because of the VAT reduction. Households that do not use gas are expected to see a much smaller increase of less than 1% under the cap.
Wholesale energy is only one part of a bill. The price cap also reflects network costs, supplier operating costs, policy costs and other allowances.
Electricity VAT has temporarily been removed
From 1 October 2026 to 31 March 2027, qualifying domestic electricity in England, Scotland and Wales is charged at 0% VAT instead of 5%.
Gas and other domestic fuels continue to include VAT at 5%.
The government estimates that removing electricity VAT will save households an average of around £45 a year, although the exact reduction depends on the electricity rate and how much electricity is used.
The change applies automatically. It covers electricity customers on default tariffs, fixed tariffs and prepayment meters. Households do not need to submit an application.
The VAT reduction is already reflected in Ofgem’s published October electricity rates. Without it, Ofgem says the typical price-cap figure would have been around £45 higher.
What should households do now?
If you did not take meter readings on or close to 30 September, submit them as soon as possible. This can help your supplier separate energy used under the previous rates from energy used after the October change.
If you have a smart meter, readings may be sent automatically. It is still worth checking your latest bill or online account to make sure the supplier is receiving readings rather than estimating your usage.
You should also review:
Your current electricity and gas unit rates
Your daily standing charges
Whether your tariff is fixed or variable
The date your fixed tariff ends
Any exit fees attached to the tariff
Your annual gas and electricity consumption
When comparing tariffs, look at the complete estimated annual cost based on your own usage. A tariff with a lower unit rate may have a higher standing charge, so comparing one figure alone can be misleading.
SaveAmp’s Tariff Comparison Calculator lets you enter the details of two tariffs and compare their estimated costs using the consumption figures you provide. It does not display or recommend live supplier tariffs.
Ofgem is due to announce the price cap covering 1 January to 31 March 2027 by 25 November 2026.
What if you cannot afford your energy bill?
Contact your supplier as early as possible if you are struggling to pay. Suppliers must work with customers who tell them they are experiencing payment difficulties.
Support could include an affordable repayment plan, additional time to pay, payment breaks or emergency credit for prepayment customers, depending on the circumstances.
Around six million households may also qualify for the £150 Warm Home Discount during winter 2026–27. Eligibility rules differ between Great Britain and Northern Ireland, so check the current Warm Home Discount guidance on GOV.UK.
The October price-cap increase is now in effect, but the £1,723 headline is not a fixed bill or maximum charge.
What you pay depends on your tariff, payment method, location and energy consumption. Check that your supplier has an accurate meter reading, review the rates on your account and compare any alternative tariff using your own annual usage.
That will provide a more reliable picture than using the headline price-cap figure alone.
