Energy Price Cap: what you'll pay from October 2026
The cap rises 4% to £1,723 a year from 1 October, with gas doing most of the damage. Here is what it means for your bill
Ofgem's price cap for 1 October to 31 December 2026 puts a typical dual-fuel household paying by direct debit at £1,723 a year. That is £60 (4%) more than the £1,663 cap that ran from July to September. This guide explains where the rise comes from, why the headline number is not your bill, and what you can do about it before winter.
Where the rise comes from
Almost all of the increase is gas. Conflict in the Middle East has pushed up wholesale oil and gas prices through the summer, and the cap tracks wholesale costs with a lag. Gas unit rates rise by roughly 8% from 1 October.
Electricity is a different story. The government has cut VAT on domestic electricity from 5% to 0% for six months from 1 October, worth about £45 a year on a typical bill. That cut is already built into the £1,723 figure. Without it, the electricity side would have risen too. As it stands, electricity unit rates are up by less than 1%.
Unit rates versus standing charges
Your bill has two parts. The unit rate is what you pay per kilowatt hour (kWh) you use. The standing charge is a fixed daily fee you pay even if you use nothing.
| Part of the bill | What it is | Cap treatment |
|---|---|---|
| Gas unit rate | Cost per kWh of gas | Up about 8% |
| Electricity unit rate | Cost per kWh of electricity | Roughly flat, 0% VAT applied |
| Standing charges | Fixed daily fee per fuel | Still apply, vary by region |
Standing charges matter most for low users. If you heat a small flat and are careful with the thermostat, a large share of your bill is the daily charge, and you cannot reduce it by using less. The cap sets a maximum for both parts, and the exact figures depend on your region and how you pay.
Why "typical" is not your bill
The £1,723 figure is what Ofgem estimates a household with typical consumption would pay over a year at the capped rates. It is a benchmark, not a limit. The cap limits the price per unit and the daily charge. It does not limit your total bill.
Use more than the typical amount and you pay more. Use less and you pay less. A large, poorly insulated house with gas heating will feel the 8% gas rise far more than a well-insulated flat. Look at your actual annual kWh figures on your bill or in your supplier's app, then multiply by the new unit rates for your region to see your own number.
Who is not affected
Around 35% of households, roughly 11 million, are on fixed tariffs. If you fixed earlier in 2026, your unit rates stay where they were until the fix ends. The one change you will see is the VAT cut on electricity, which suppliers must pass on to fixed-tariff customers too.
If you are on a prepayment meter or pay on receipt of bill, your cap level is different from the direct debit figure. Check your supplier's letter or email for your rates.
What happens after December
This cap runs for three months. Ofgem will announce the January to March 2027 cap in late November. With wholesale prices still elevated and the Bank of England noting the same energy pressures, a further rise in January is possible. Nobody knows for certain. If you want to remove that uncertainty, a fixed tariff is the tool, but only if the fixed unit rates are competitive against the cap. We cover that decision in a separate guide.
What to do next
- Submit a meter reading on or just before 1 October so your supplier bills the old rates for everything used before then.
- Check your direct debit. If you have built up a credit balance over summer, ask whether it needs to rise as much as your supplier suggests.
- Find your annual kWh usage and work out your own figure rather than relying on the headline.
- If you receive means-tested benefits, check the Warm Home Discount, which is now automatic for most eligible households.
- Consider whether a fix suits you before any January change is announced.
Information from Ofgem sets the cap levels. Suppliers must publish your regional rates.