Energy Price Cap 2026: October Rise Confirmed – What You’ll Pay From 1 October

The energy price cap 2026 is changing again: if you are on a standard variable tariff, the typical household figure will rise from £1,663 to £1,723 a year from 1st October 2026.

That is a 4% increase, equivalent to around £60 a year or £5 a month for a typical household paying by Direct Debit if the new level remained in place for a full year.

However, there is an important twist this time. The government is removing VAT from household electricity bills from 1 October, helping to hold electricity costs down while higher wholesale gas prices are pushing gas bills upwards.

Your personal bill will not automatically become £1,723. The energy price cap limits the unit rates and standing charges suppliers can charge on default tariffs. What you actually pay still depends on how much gas and electricity you use, where you live, your meter and how you pay.

Energy Price Cap 2026: what you are paying right now

Until 30 September 2026, the current price cap benchmark for a typical dual-fuel household paying by Direct Debit is £1,663 a year.

From 1 October to 31 December 2026, that benchmark rises to £1,723.

The October increase affects households on standard variable or default tariffs. Ofgem says around 20 million households are currently on standard variable tariffs.

If you are on a fixed-rate tariff, the price cap itself does not set your contracted unit rates. However, the electricity VAT reduction from October also applies to fixed tariffs, so that particular saving is not limited to households on the price cap.

Energy Price Cap 2026: What are the new electricity and gas rates from October?

For a household paying by Direct Debit on a standard variable tariff, Ofgem has published the following average rates across England, Scotland and Wales.

These are national averages. Your exact rates can differ depending on your region, payment method and meter type.

You can check the official regional figures on Ofgem’s energy price cap unit rates and standing charges page.

Energy Price Cap 2026: Why are gas bills driving most of the October increase?

The biggest pressure this time is gas.

Ofgem says higher international wholesale gas prices are the main reason for the October price-cap increase. Wholesale costs have risen as global gas markets have become more volatile.

Ofgem says gas bills under the October cap are expected to rise by around 8%, while electricity bills will remain broadly stable because the government’s VAT reduction offsets some of the wider energy-cost increase.

That means households that use little or no gas may experience a much smaller overall increase. Ofgem says households that do not use gas could see an increase of less than 1%.

Energy Price Cap 2026: Electricity VAT is being removed from 1 October

One of the biggest new household energy changes is the temporary removal of VAT from domestic electricity.

From 1 October 2026, VAT on household electricity bills will fall from 5% to 0%.

The government estimates that this will save households an average of around £45 a year.

You do not need to apply for the VAT reduction. Your supplier should automatically stop charging VAT on the electricity portion of your bill.

The change applies to households on standard variable tariffs, fixed tariffs and prepayment meters.

Gas will continue to carry 5% VAT.

The 0% electricity VAT rate is currently due to apply from 1 October 2026 to 31 March 2027.

You can read the government’s explanation of the change at GOV.UK: Breathing space on your energy bill.

Energy Price Cap 2026: Why did the July price cap suddenly change from £1,862 to £1,663?

If you remember reading that the July 2026 price cap was £1,862, you are not imagining it.

Ofgem changed the way it describes the energy use of a “typical” household during the summer by updating its Typical Domestic Consumption Values, usually shortened to TDCVs.

These values are estimates of how much electricity and gas a typical household uses each year. Ofgem periodically updates them as household energy consumption changes.

The regulator found that typical consumption has fallen. The new benchmark assumes roughly 7% less electricity use and 17% less gas use than the previous assumptions.

Using the newer benchmark, the current July-to-September price cap is shown as £1,663 rather than the previously quoted £1,862.

The October cap is therefore shown as rising from £1,663 to £1,723.

For comparison, using the older 2023 consumption assumptions, Ofgem says the equivalent figures would have been around £1,862 for the current period and £1,935 from October.

This is important because you should not interpret the move from £1,862 to £1,663 as a sudden £199 cut to everyone’s bill. It is mainly the result of Ofgem changing the assumed amount of energy used when illustrating a typical annual bill.

Your own bill continues to depend on your actual usage and the rates you pay.

Energy Price Cap 2026: What does the October cap mean if you are on a fixed tariff?

If you are already on a fixed energy tariff, the new £1,723 price-cap figure does not replace the rates in your contract.

You will normally continue paying the gas and electricity unit rates you agreed when you fixed.

There is one important exception to remember this winter: the electricity VAT reduction applies to fixed tariffs too.

Your supplier should therefore remove VAT from the electricity element of your bill from 1 October without you needing to switch tariff.

Energy Price Cap 2026: Should you fix your energy tariff before October?

Do not assume that remaining on the price cap is automatically the cheapest option.

Ofgem says fixed tariffs are available below the October price-cap level, but whether fixing is right for you depends on the actual rates offered in your area.

Before agreeing to a fixed deal, compare:

• the electricity unit rate;
• the gas unit rate;
• both daily standing charges;
• the length of the fix;
• exit fees;
• whether the deal requires a smart meter;
• your estimated annual cost based on your own usage.

A tariff with a tempting headline annual estimate can still be less suitable for your household if the standing charges are high or you would face expensive exit fees.

Also remember that predictions about the January 2027 price cap are forecasts, not confirmed prices. Do not commit to a long fixed deal solely because of a forecast.

Energy Price Cap 2026: Your practical next steps before 1 October

1. Check whether you are fixed or variable

Look at your latest energy bill or online account. If it says standard variable, flexible, default or similar wording, the Ofgem price cap is likely to apply.

2. Compare your actual rates

Do not compare only the £1,723 headline number. Compare the unit rates and standing charges on your bill with the October rates available for your region.

3. Take meter readings around 30 September

If you do not have a smart meter that reliably sends readings automatically, taking electricity and gas meter readings around the changeover date can help your supplier separate energy used under the old and new rates.

Keep a photograph of the readings for your records.

4. Check your Direct Debit

Your supplier may review your monthly payment after the new cap takes effect.

If your Direct Debit changes substantially, check whether the new amount reflects your actual usage, account balance and expected winter consumption.

5. Look at fixed tariffs before automatically accepting the increase

If your current tariff is variable, compare available fixed rates. Concentrate on the full annual cost for your household rather than simply choosing the supplier advertising the lowest headline rate.

6. Check the Warm Home Discount

The Warm Home Discount will reopen for winter 2026 to 2027 and provides eligible households with a one-off £150 discount on their electricity bill.

Most eligible households in England and Wales should receive the payment automatically following data matching, although arrangements differ in Scotland.

You can check current eligibility information at GOV.UK’s Warm Home Discount guidance.

7. Contact your supplier early if you are struggling

Do not wait until arrears become unmanageable.

Ofgem says suppliers should work with customers who are struggling with bills and may be able to offer affordable repayment plans, payment support or access to other financial assistance.

Tell your supplier what you can realistically afford and ask what hardship support is available.

When will the next energy price cap be announced?

The October price cap applies from 1 October to 31 December 2026.

The next Ofgem price cap will cover the period from 1 January to 31 March 2027.

Ofgem says that level is due to be announced by 25 November 2026, although it can publish earlier if external circumstances require it.

Until Ofgem publishes the figure, January price-cap numbers from analysts and comparison companies remain forecasts rather than confirmed household prices.

Energy Price Cap 2026: what matters most

The headline change is straightforward: the typical price-cap figure rises from £1,663 to £1,723 on 1 October.

But the details matter more than the headline.

Gas is responsible for most of the increase. Electricity costs are being cushioned by the temporary VAT cut. Electricity standing charges are falling slightly on average, while gas unit rates and standing charges are rising.

And because the £1,723 figure is only an illustration based on typical consumption, your own winter bill could be considerably higher or lower.

Your best protection is to know your current unit rates, understand your usage, compare tariffs carefully and check what support you qualify for before colder weather increases your consumption.

Energy Price Cap 2026: Useful HUBS guides

• Visit the HUBS Energy section for practical ways to manage your household energy costs.
• See what changed when the July 2026 price cap began.
• Use our July energy price cap checklist to understand the checks worth carrying forward.
• Use the free 3-Minute Bill Reset Checklist to see which household bills may be worth reviewing.

Official energy price cap guidance

• Ofgem: October to December 2026 energy price cap changes
• Ofgem: energy price cap unit rates and standing charges
• GOV.UK: electricity VAT reduction from October 2026
• GOV.UK: Warm Home Discount

People Also Asked…

What is the current energy price cap in September 2026?

The current typical household price-cap figure is £1,663 a year for a dual-fuel household paying by Direct Debit. It applies until 30 September 2026. Your actual bill is not capped at £1,663 because you still pay according to the amount of energy you use.

What will the energy price cap be from October 2026?

Ofgem has confirmed that the typical household figure will rise to £1,723 from 1 October to 31 December 2026. That is around 4% higher than the current £1,663 benchmark.

What are the October 2026 electricity and gas rates?

For an average Direct Debit customer, electricity will be around 26.32p per kWh with a 54.83p daily standing charge. Gas will average 7.97p per kWh with a 29.68p daily standing charge. Actual rates vary by region.

Will electricity VAT really be removed?

Yes. From 1 October 2026, domestic electricity VAT will fall from 5% to 0%. The reduction applies automatically, including to households on fixed tariffs and prepayment meters. Gas will continue to have 5% VAT.

Why is the July price cap now £1,663 instead of £1,862?

Ofgem updated the Typical Domestic Consumption Values used to illustrate how much energy a typical household uses. The newer assumptions are lower, so the headline annual figure changed. This does not mean every household suddenly received a £199 reduction; your actual bill continues to depend on the energy you use and your tariff rates.