Ofgem has confirmed that the energy price cap will rise by 4% from 1 October 2026. For a typical household paying by direct debit for gas and electricity, the annualised illustration increases from £1,663 to £1,723.
That is around £60 a year, or £5 a month, using Ofgem's updated typical-consumption measure. It is not a maximum bill.
The full Ofgem October price-cap announcement applies from 1 October to 31 December 2026.
The cap limits prices, not total spending
The price cap limits unit rates and standing charges for customers on covered default tariffs. Your bill is still usage multiplied by the unit rate, plus daily standing charges.
From October, average direct-debit cap rates are:
- Electricity: 26.32p per kWh and a 54.83p daily standing charge
- Gas: 7.97p per kWh and a 29.68p daily standing charge
Rates vary slightly by region, payment method and meter type. Check Ofgem's current unit-rate tables and your supplier's notice.
Gas-heated homes face more of the increase
Ofgem says most of the October increase is driven by gas. Gas bills for the typical profile rise by about 8%, while households that do not use gas see an increase of less than 1%.
Domestic electricity is temporarily zero-rated for VAT from October 2026 to March 2027, which offsets some pressure on electricity prices.
The result is that two homes described as “typical” can experience the change very differently.
Why the headline comparison changed
Ofgem updated its Typical Domestic Consumption Values because households are using less energy than at the previous review. It estimates typical electricity use has fallen by around 7% and gas use by 17%.
This means the new £1,723 headline should not be compared mechanically with every older cap headline. Your own annual kWh consumption gives a much better comparison.
Find it on a recent bill or annual statement.
Fixed tariff or variable tariff?
Around 35% of households are on fixed tariffs and are not directly moved onto the October cap. Ofgem reported that some fixed deals were available below the new cap at the time of its announcement.
Before fixing, compare:
- Unit rates for both fuels
- Standing charges
- Contract length
- Exit fees
- Whether prices could fall during the fix
- Your actual gas and electricity use
There is no guarantee that a fixed deal will prove cheapest. It purchases price certainty.
Budget for winter usage, not one-twelfth of the headline
Heating consumption is seasonal. A £1,723 annual illustration does not mean every month's actual usage is £143.58.
If you pay a flat monthly direct debit, the supplier attempts to smooth this variation. Check whether the debit reflects recent meter readings and whether the account has accumulated a large debit or credit balance.
For planning, use last winter's kWh consumption and apply the new rates. Allow for changes in household size, working from home and the efficiency of the property.
Practical checks before October
- Submit a meter reading near the tariff-change date.
- Confirm whether you are fixed or variable.
- Compare using annual kWh, not only the headline cap.
- Review the direct debit after the supplier updates it.
- Check eligibility for the Warm Home Discount or other support.
- Contact the supplier early if payment is becoming difficult.
Ofgem says suppliers should work with struggling customers on affordable repayment plans and routes to financial assistance.
Put the home itself into the calculation
An inefficient property can cost more to heat even when its rent is lower. Before moving, inspect the Energy Performance Certificate, heating system and evidence of damp or draughts.
Use the monthly budget calculator with a realistic winter figure and test it again in the monthly reality check alongside rent, travel and childcare.
Cap levels and unit rates checked on 2 September 2026. Your bill depends on region, tariff, payment method and actual consumption.