Ofgem confirmed on 26 August 2026 that the energy price cap will rise 4% to £1,723 a year for a typical dual-fuel direct-debit household from 1 October to 31 December 2026, up £60 from the current £1,663. The increase is driven mainly by an 8% rise in gas costs; a government electricity VAT cut held it about £45 lower.
TL;DR · LAST REVIEWED Ofgem confirmed on 26 August 2026 that the energy price cap will rise 4% to £1,723 a year for a typical dual-fuel direct-debit household from 1 October to 31 December 2026, up £60 from the current £1,663. The increase is driven mainly by an 8% rise in gas costs; a government electricity VAT cut held it about £45 lower.
- The energy price cap rises 4% to £1,723 a year (up £60, or £5 a month) for a typical household from 1 October 2026.
- It replaces the current £1,663 cap and runs for 1 October to 31 December 2026.
- Most of the rise is gas: gas bills go up 8%, while households not using gas see less than 1%.
- A government cut to electricity VAT from 1 October held the increase about £45 lower than it would have been.
- The cap protects about 22 million households on default tariffs; 35% (11 million) on fixed deals are unaffected.
- October rates (direct debit, GB average): electricity 26.32p/kWh and 54.83p/day standing charge; gas 7.97p/kWh and 29.68p/day.
KEY FACTS
- The energy price cap rises 4% to £1,723 a year (up £60, or £5 a month) for a typical household from 1 October 2026.
- It replaces the current £1,663 cap and runs for 1 October to 31 December 2026.
- Most of the rise is gas: gas bills go up 8%, while households not using gas see less than 1%.
- A government cut to electricity VAT from 1 October held the increase about £45 lower than it would have been.
- The cap protects about 22 million households on default tariffs; 35% (11 million) on fixed deals are unaffected.
- October rates (direct debit, GB average): electricity 26.32p/kWh and 54.83p/day standing charge; gas 7.97p/kWh and 29.68p/day.
What has changed
Ofgem has confirmed that the energy price cap for 1 October to 31 December 2026 will rise by 4% to £1,723 a year for a typical household using both gas and electricity and paying by direct debit. That is an increase of about £60 a year, or £5 a month, from the current £1,663 cap that runs until 30 September. The cap sets the maximum unit rates and standing charges suppliers can charge on default tariffs, so households that use more energy will still pay more.
Why bills are rising
The increase is driven mainly by higher wholesale gas prices, with gas bills rising about 8%. Households that do not use gas will see a much smaller increase of less than 1%. A government cut to VAT on electricity, which also takes effect on 1 October, held the rise about £45 lower than it would otherwise have been, and applies automatically through suppliers including for customers on fixed tariffs.
Who is affected
The cap protects around 22 million households on default or standard variable tariffs. About 35% of households, roughly 11 million, are on fixed-rate deals and are not affected by this change. On Ofgem's older 2023 consumption basis the same cap would read £1,862 rising to £1,935; the lower headline figures reflect the updated assumption that households now use less energy.
What to do before 1 October
Submit a meter reading on or close to 30 September so your supplier bills usage before the new rates at the old price. Compare fixed tariffs, some of which sit below the cap, and check eligibility for support such as the Warm Home Discount or supplier hardship funds. There is no need to switch in a panic: the cap changes every three months, and fixing only makes sense if the deal beats the cap over its term.
October 2026 unit rates and standing charges
For a household on a default tariff paying by direct debit, the average rates across England, Scotland and Wales from 1 October are set out below. Electricity carries no VAT between October 2026 and March 2027; gas still includes VAT at 5%. Because of the electricity VAT removal, these figures cannot be compared directly with earlier periods. The cap also covers standard credit, prepayment and Economy 7 customers.
| Fuel | Unit rate | Standing charge |
|---|---|---|
| Electricity | 26.32p per kWh | 54.83p per day |
| Gas | 7.97p per kWh | 29.68p per day |
Ofgem will announce the next cap, for 1 January to 31 March 2027, on 25 November 2026.
DISCLAIMER
This article is editorial information, not financial advice. Kael Tripton Ltd is not authorised or regulated by the Financial Conduct Authority. Figures were correct at the last review date shown above; verify current rates and rules with the primary sources listed below before acting.
Frequently asked questions
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, up £60 from £1,663.
Why is the price cap going up?
Mainly higher wholesale gas costs, which push gas bills up 8%. A government electricity VAT cut from October held the rise about £45 lower.
Does the cap limit my total bill?
No. Ofgem caps unit rates and standing charges, not the total. If you use more energy, you pay more.
Am I affected if I am on a fixed tariff?
No. Around 35% of households (11 million) are on fixed tariffs and are not affected by this change.
What should I do before 1 October?
Submit a meter reading on or near 30 September, compare any fixed deals below the cap, and check whether you qualify for energy bill support.
Sources
