Last Updated: 16/09/2026
As of 1 October 2026, the Energy Price Cap has risen to £1,723 per year for a typical dual-fuel household paying by Direct Debit. That is a 4% increase (around £60 a year) compared to the £1,663 cap that applied from July to September 2026.
The rise is driven by higher wholesale gas prices, but it has been softened by a significant change: the government has cut VAT on electricity from 5% to 0% for the period 1 October 2026 to 31 March 2027. This means gas unit rates rise sharply this quarter, while electricity rates are held broadly stable.
Update26 August 2026: Ofgem confirmed the energy price cap will rise 4% to £1,723 from 1 October 2026. Gas unit rates rise to around 7.97p per kWh, while electricity is held at around 26.32p per kWh, helped by the government cutting VAT on electricity to 0% until 31 March 2027.
+4% Overall cap rise from 1 October 2026 | £1,723 Typical annual bill | £60 Extra per year for a typical household
Set by Ofgem, the Energy Price Cap limits what suppliers can charge per unit of gas and electricity, as well as daily standing charges, for households on standard variable (default) tariffs. It is designed to stop customers being overcharged, but it does not cap your total bill. If you use more energy, you pay more, and if you use less, you pay less.
The table below shows the average unit rates and standing charges for customers paying by Direct Debit on a standard variable tariff. Actual rates vary by region.
| Rate | Jul–Sep 2026 | Oct–Dec 2026 |
|---|---|---|
| Electricity unit rate | 26.11p per kWh | 26.32p per kWh |
| Electricity standing charge | 57.19p per day | 54.83p per day |
| Gas unit rate | 7.33p per kWh | 7.97p per kWh |
| Gas standing charge | 29.04p per day | 29.04p per day |
Based on Ofgem's Price Cap. October figures include 5% VAT on gas and 0% VAT on electricity. Because of the VAT change, October rates cannot be compared directly to previous periods. Actual rates vary by region.
Ofgem raised the cap by 4% for the period covering 1 October to 31 December 2026. The main driver is wholesale energy costs, which have increased by around 11% and now make up 47% of the total cap, up from 44% the previous quarter.
Several factors have pushed wholesale prices higher:
Because gas still sets the price of much of our electricity, the gas wholesale allowance is up 13% and the electricity wholesale allowance is up 10% compared to the previous quarter.
There is one significant piece of good news for households. The government has cut VAT on electricity from 5% to 0% for the period 1 October 2026 to 31 March 2027. This applies to all electricity bills, including those under the price cap. VAT on gas remains unchanged at 5%.
This is why electricity unit rates have been held broadly stable this quarter despite rising wholesale costs, while gas rates have risen more noticeably. It also means October rates cannot be compared like-for-like with earlier periods.
The table below shows how the energy price cap has changed over recent quarters, and when it is next due to be reviewed.
| Time Period | Price Cap | Change |
|---|---|---|
| 1 October 2025 to 31 December 2025 | £1,755 a year | ▲ UP 2% |
| 1 January 2026 to 31 March 2026 | £1,758 a year | ▲ UP 0.2% |
| 1 April 2026 to 30 June 2026 | £1,641 a year | ▼ DOWN 6.7% |
| 1 July 2026 to 30 September 2026 | £1,663 a year | ▲ UP 13% |
| 1 October 2026 to 31 December 2026 New | £1,723 a year | ▲ UP 4% |
Figures are for a typical dual-fuel household paying by Direct Debit, based on Ofgem's Typical Domestic Consumption Values. The cap is reviewed every three months.
The £1,723 figure applies to Direct Debit customers, but the cap is set at different levels depending on how you pay. The table below shows the typical annual bill for each payment method from 1 October 2026.
| Payment Method | Jul–Sep 2026 | Oct–Dec 2026 | Change |
|---|---|---|---|
| Direct Debit | £1,663 | £1,723 | ▲ 4% |
| Standard Credit | £1,796 | £1,861 | ▲ 4% |
| Prepayment (PPM) | £1,620 | £1,678 | ▲ 4% |
| Economy 7 (Direct Debit) | £1,039 | £1,046 | ▲ 1% |
Values use the current (2026) Typical Domestic Consumption Values at medium consumption. Economy 7 figures use multi-register consumption values and are not directly comparable to single-rate tariffs.
Not everyone is affected by the October increase. Around 11 million households were on fixed tariffs as of August 2026 and are protected from the change until their deal ends. The cap applies to roughly 20 million households on standard variable (default) tariffs, including around 5 million prepayment meter customers and 3 million standard credit customers.
Your tariff details appear on your energy bill. If you are on a 'Standard Variable' tariff or a 'Deemed Contract', the cap applies. If you are on a fixed-rate tariff, the cap will not affect you until that deal expires.
The energy price cap is reviewed every three months. The current cap runs from 1 October to 31 December 2026. The next cap, covering 1 January to 31 March 2027, is expected to be announced in late November 2026. Early industry predictions suggest a further rise is likely, with gas prices potentially rising by a further 12%, though the monitoring period that sets this cap has only just opened, so this remains a forecast rather than a confirmed figure.
“The October rise is smaller than July's, and the VAT cut on electricity is genuinely welcome, but the underlying picture is a gas market still exposed to global volatility. With gas unit rates now near their highest since early 2023, and further rises predicted for January, fixing remains the clearest way for households to take back control. Many fixed deals are still available below the new cap level.
SBScott Byrom — Chief Executive Officer, The Energy Shop
With the cap rising again, there are several practical steps households can take to manage costs:
🔒Switch to a fixed tariff. Many fixed deals remain available below the new cap level, offering price certainty for 12 to 24 months.
💳Pay by direct debit. Direct debit is the cheapest payment method under the cap, cheaper than standard credit or prepayment.
📡Get a smart meter. Smart meter customers can access half-price or cheaper electricity at weekends on some tariffs.
📞Contact your supplier if you are struggling. Suppliers must offer tailored repayment plans, financial assistance, or debt advice.
The Energy Price Cap is a legal requirement that energy suppliers must comply with. Set by Ofgem, the energy regulator, it protects households against unfair rises in gas and electricity costs on standard variable or default tariffs.
The cap sets a limit on the unit rate (the amount you pay per kilowatt hour) and standing charges (the daily charge whether or not you use energy). It does not cap your total bill. If you use more energy than the average household, you pay more.
The cap is based on Ofgem's Typical Domestic Consumption Values (TDCVs), which were updated in 2026 to reflect lower average household energy use. These are now 2,500 kWh a year for electricity and 9,500 kWh a year for gas.
Price caps are also based on your region, due to transportation costs, and higher rates may apply if you do not pay by direct debit.
With the cap rising again and further increases forecast for January 2027, the most effective way to protect yourself from further fluctuations is to switch to a fixed-rate tariff, either with your existing supplier or a new one. A fixed deal locks in your unit rates for a set period, typically 12 to 24 months, giving you cost certainty regardless of what happens to the cap next quarter.
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The Energy Shop is a free, independent and impartial energy price comparison service. We can help you compare and switch energy suppliers to help you save money. Our service is accredited by the Ofgem Confidence Code.
