Millions of households face a slightly higher energy bill this winter after Ofgem confirmed a 4 percent rise in the price cap for the final three months of 2026. The increase is modest in pounds, yet it is uneven between gas and electricity, and it arrives alongside a revised way of measuring typical use. In this article we will explore what the new figures mean, why gas is pushing the cap up, who is sheltered by fixed deals, and how to prepare for the winter.
The new cap in figures
Ofgem’s price cap for 1 October to 31 December 2026 is £1,723 a year for a typical dual-fuel household paying by direct debit. That is 4 percent, or £60 a year, above the £1,663 it replaces, which works out at about £5 a month. Ofgem set out the figure in a press release on 26 August, and Money to the Masses explained the detail the same day.
The cap does not limit what you pay in total. It limits the unit rates and daily standing charges that suppliers can charge on standard variable tariffs, and the £1,723 headline is simply what those rates add up to for a household using a fixed, typical amount of gas and electricity. If you use more than that amount your bill will be higher, and if you use less it will be lower.
The distinction matters throughout this article, because most arguments about the cap are really arguments about what counts as typical. The table below sets the new rates against the previous ones for direct debit customers, using the figures Ofgem published.
| Charge | Previous cap | From 1 October |
| Electricity unit rate (per kWh) | 26.11p | 26.32p |
| Electricity standing charge (per day) | 57.19p | 54.83p |
| Gas unit rate (per kWh) | 7.33p | 7.97p |
| Gas standing charge (per day) | 29.04p | 29.68p |
| Typical dual-fuel bill (per year) | £1,663 | £1,723 |
Two patterns stand out. Unit prices went up for both fuels, but the electricity standing charge, the fixed daily fee you pay simply for being connected, went down by a noticeable amount. That helps explain why the electricity side of the bill barely moves while the gas side climbs.
Ofgem also offers some context for the new level. It says prices are 7 percent higher than in the same period of 2025, yet 52 percent, or £1,859, below the peak of the 2022 crisis, when the government stepped in to hold bills at £2,500 a year. The second comparison is Ofgem’s own wording, and it is worth keeping in mind that a figure sitting well below a crisis peak is not the same as a figure that feels affordable.
The words “typical” and “direct debit” in the headline are doing real work. The rates in the table are the ones Ofgem quotes for customers paying by direct debit, and customers who pay another way, such as prepayment, can face slightly different cap rates, a point covered later. The sums also assume a dual fuel home, meaning one supplied with both gas and electricity. If your home is different, your own unit rates and standing charges, which are printed on every bill and in your online account, are the numbers to check against the table.
Gas takes the strain while electricity holds steady
The headline rise of 4 percent hides a split. Gas bills are going up by 8 percent, while households that do not use gas see an increase of less than 1 percent. Anyone heating with mains gas, which is most homes in Great Britain, will therefore feel the change more than the average suggests.
Gas unit rates and standing charges
The gas unit rate rose from 7.33p to 7.97p per kWh, a difference of 0.64p. The daily standing charge also moved up, from 29.04p to 29.68p, which is another 0.64p each day, or roughly £2.30 over a full year. The standing charge is a small part of the story. The unit rate is where winter bills are made, because gas use is concentrated in the coldest months.
As a purely illustrative calculation with invented round numbers, a home that burned 10,000 kWh of gas in a year would pay about £64 more in unit costs at the new rate, before adding the small standing charge difference. A flat that used half as much would see roughly half of that. The point is simply that the pounds-and-pence effect scales with how much heat you buy.
Electricity and the VAT change
On electricity, the unit rate rose slightly, from 26.11p to 26.32p per kWh, but the standing charge fell from 57.19p to 54.83p a day. Over a year, the lower standing charge is worth roughly £8.60, which is more than a typical household would lose on the higher unit rate if it used electricity at a modest level. Again as an invented round-number illustration, a home using 2,500 kWh would pay about £5 more at the unit level and save about £8.60 on the standing charge.
Ofgem links the steadiness of electricity to a decision by the government to remove VAT from domestic electricity bills. According to Ofgem, that step keeps electricity bills broadly stable, and without it the overall increase would have been about £45 higher. The VAT change is a government measure rather than something Ofgem controls, so it is worth knowing that your electricity bill is being held in place partly by policy rather than purely by market prices.
Homes without gas
Households with no gas connection, such as many with heat pumps or electric heating, face an increase of less than 1 percent. This is welcome for those households, but it comes with a caution. Electricity is generally the more expensive fuel per unit, so an all-electric home can have a large bill even when the percentage change is small. The percentage tells you how fast your bill is moving, not how heavy it already is.
What the split means across a year
Because gas use peaks in the winter, an 8 percent rise in the gas bill is not spread evenly across the twelve months. The October to December quarter is the start of the heavy heating season, so more of the extra cost lands in the colder weeks, and the cap for the next quarter will matter even more because January to March is usually the most expensive stretch for gas.
Electricity use is steadier through the year, apart from the darker evenings. This is one reason many households find their bills feel larger than the annual figure divided by twelve would suggest, and why a monthly direct debit that smooths payments can hide a winter shortfall until spring.
Wholesale markets explain the direction of travel
The reason Ofgem gives for the rise is that gas is more expensive on international markets. Neil Kenward, Ofgem’s Director General for Markets, put it this way: “High international gas prices are continuing to drive energy costs in the UK.” Money to the Masses connects those higher prices to the conflict in the Middle East, which is its own reading of events and not something the cap figures themselves prove.
Wholesale prices are up 11 percent over three months, according to the figures behind the announcement. That is a bigger movement than the 4 percent in the cap, and the gap is not a mistake.
Part of what you pay is not the cost of buying energy at all. Network charges for moving gas and electricity to your home, the cost of government policy schemes, supplier operating costs and a permitted margin all sit in the cap alongside the wholesale element. When one part of a bill rises quickly, the total rises more slowly.
It also helps to remember how the mechanism works. Ofgem reviews the cap every three months and builds the new level from wholesale costs observed in a window before the announcement, so the cap lags the market. A jump in wholesale prices in the weeks before a decision shows up in the cap soon after, while a fall takes a similar time to arrive. That lag is why a rise in the autumn can feel baffling if the weather is still mild, and why a cap announced in a cold month can be lower than people expect.
Britain relies heavily on gas, both for heating and for generating a share of its electricity, and gas is traded on international markets where events abroad, storage levels and demand in other countries all feed into the price. That exposure is why a conflict far from the UK can show up on a bill in Leeds or Cardiff a few months later. It is also why the cap can move in either direction from one quarter to the next. A rise this autumn says little by itself about where prices will be in spring.
For readers who like perspective, the numbers give a mixed picture. At 7 percent above the same period last year, the cap is clearly higher than a year ago, and at 52 percent below the peak of the 2022 crisis it is also far from the worst point. Neither statement cancels the other. Households with tight budgets live in the present tense, and for them a rise of £60 a year is another small pressure on top of the rest.
Lower typical use values change the sums
One change that deserves more attention than it gets is a revision to what Ofgem counts as typical use. According to Money to the Masses, the typical figure for gas was cut from 11,500 kWh to 9,500 kWh, and for electricity from 2,700 kWh to 2,500 kWh. Ofgem made the change because households use about 7 percent less electricity and 17 percent less gas than the old values assumed.
The effect on the headline is large. Money to the Masses reports that, on the old values, the October cap would have been £1,935. The published £1,723 is about £212 lower than that figure, and the reason is not that energy became cheaper but that the sum now assumes a smaller household appetite. Ofgem’s own comparison with the previous quarter is the 4 percent rise, and the £1,935 figure is useful as extra context rather than as a replacement for it.
What does this mean in practice? It means the headline number is an index, not a prediction of your own bill. A family in a large, draughty house will have used more than 9,500 kWh of gas and will see a bigger cash rise than the 4 percent suggests. A couple in a well-insulated flat may use well under the typical amount and see only a small change. The best way to judge your own position is to look at your annual usage figure on a recent bill or in your online account, and compare it with the typical values.
It is also worth noticing what the lower values say about behaviour. If households really are using 17 percent less gas, then insulation, more efficient boilers, careful heating and mild weather are all doing some of the work of holding bills down. That is encouraging, yet it also means the pound figure for a typical home understates how many people have already cut back and have little left to trim.
There is a practical lesson in the revised values for anyone comparing quotes. When a supplier or comparison service shows an estimated annual cost, it will be based on an assumed level of use, and the assumption may be the old figure, the new one or your own. Two quotes built on different usage assumptions cannot be compared fairly. Always enter your own annual kWh, taken from a bill, so that every offer is priced on the same basis.
Fixed tariffs offer shelter, with strings attached
About 35 percent of households, around 11 million, are on fixed tariffs, and the rise in the cap does not touch them. For everyone else, the cap is the price. Choosing between staying on the variable rate and fixing is the main decision in front of most households at the moment.
Households already on a fixed deal
If you are on a fixed tariff, your unit rates and standing charges stay at the agreed level until the end date. The cap matters to you only when that date arrives, because you will normally be moved onto the supplier’s standard variable tariff, which follows the cap, unless you choose a new deal. Put the end date in your calendar. Many people discover too late that a deal has expired and that they have been paying the variable rate for months.
Thinking about a new fix
Ofgem says that some fixed tariffs are £100 or more below the cap, which makes fixing look attractive. Before signing, remember two risks. First, if wholesale prices fall, a fixed customer can end up paying more than the variable rate would have charged, because the fix does not move down with the market. Second, early exit fees may apply if you leave a fix before it ends, which can make switching away costly if a better offer appears.
The sensible approach is to compare the total annual cost of a fixed deal against the cap at your own usage, look at the length of the fix, and read the exit fee terms. Use a comparison service that is accredited by Ofgem, and check whether a cheap-looking deal comes with conditions, such as needing to manage your account online or pay by direct debit. A fix is a bet on prices, and as with any bet you should decide how much it is worth to you to avoid a rise.
A few questions are worth asking before you commit. How long does the fix last, and what happens on the last day? Is the standing charge higher than the cap’s, which can wipe out a lower unit rate for a low use home? Are there exit fees, and are they a flat sum or charged per fuel? Does the supplier let you switch away without penalty in the final weeks? A deal that looks cheaper on its headline can turn out dearer once these answers are added up, especially for a small household where standing charges are a large share of the bill.
Prepayment and smart meter customers
Prepayment customers pay slightly lower cap rates. Ofgem estimates the difference at about £45 a year less than direct debit. That difference is small, and prepayment brings its own drawbacks, such as the risk of going without supply if the meter runs out of credit, so it is not a reason to change how you pay on its own.
Smart meter users may be able to get cheaper off-peak electricity, according to Ofgem. Time-of-use tariffs charge less for electricity at certain hours, usually overnight, and more at busy times. They suit households that can move washing, dishwashing or electric vehicle charging into the cheap hours. If your use is mostly in the early evening, the opposite can happen and such a tariff may cost more, so check the hours and rates against your own habits.
Steps worth taking before January
The cap in force now runs only to 31 December, so the next change is already on the horizon. Planning for it does not need complicated tools. It needs a few checks done calmly in the next few weeks.
Most people do better when they treat the cap as a fixed calendar event. It is reviewed four times a year, and each review is a chance to check your tariff and your payments. Households that look only when a bill shocks them tend to lose money in the weeks between the surprise and the fix. A ten-minute check each quarter, with a meter reading and a look at your unit rates, is a small habit with a lasting payoff.
January forecasts are estimates, not announcements
Money to the Masses reports that analysts predict a further rise of 12 to 14 percent from January 2027. It also lists supplier forecasts for January to March 2027: EDF at £1,932, E.ON Next at £1,941 and British Gas at £1,970. Those figures sit roughly £210 to £250 above the current cap of £1,723.
They are supplier forecasts, not official numbers, and forecasts of this kind can be wrong in either direction because wholesale prices keep moving until the decision is made.
Ofgem is expected to announce the next level late in the autumn. Until then, treat the forecasts as a reason to prepare, not as a fact to budget around to the pound. If wholesale prices ease, the actual figure could come in lower, and if they rise, higher.
A sensible order of checks
Start with your tariff. Find out whether you are on a fixed deal, when it ends and what happens afterwards. Then take a meter reading and submit it, so that your supplier bills you on real use and not an estimate. Estimated bills are a common cause of surprise charges and of direct debits that are too high or too low.
Next, look at your direct debit. A debit set too low builds up a debt that can arrive as a large catch-up demand, while one set too high leaves your money with the supplier. Many suppliers will let you adjust it if you show your readings. Finally, compare fixed tariffs against the cap at your own usage, bearing in mind the exit fee and price-fall risks described above. If you decide to wait, set a reminder for when Ofgem’s next announcement arrives.
Cutting use without discomfort
Because the cap is built on per-unit prices, using less is the one lever fully in your hands. Draught proofing doors and windows, closing curtains at dusk and bleeding radiators cost little and help rooms hold their heat. If you have a combination boiler, many installers say that lowering the flow temperature setting can cut gas use, though you should check your boiler manual or ask a qualified engineer first. Heating controls matter too: a programmer or thermostat set to warm the home only when you are in it avoids paying for empty rooms.
On the electricity side, the biggest wins are usually the heaviest and longest-running appliances. Washing at lower temperatures, avoiding standby on devices and replacing very old fridges and freezers all help over time. None of this changes the cap, but a household that trims its use will see a smaller effect from any rise, whichever way the January number goes.
If money is tight
If you are struggling to pay, contact your supplier early and ask what support is available. Suppliers can often agree a repayment plan, review your direct debit or point you to help schemes, and the conversation is easier before arrears build up. Free, independent debt advice is available from MoneyHelper, StepChange and Citizens Advice, and none of them charge for guidance.
Keep in mind that the price cap figures are about typical households, and your personal situation may involve other help that is not described here. The agencies above, or Ofgem, can advise on your own case. This article is general information, not personal financial advice.
Frequently Asked Questions
How much is the energy price cap from October 2026?
The cap for 1 October to 31 December 2026 is £1,723 a year for a typical dual-fuel household paying by direct debit. That is up 4 percent, or £60 a year, from £1,663. Your own bill depends on how much energy you use.
Does the October price cap rise affect people on a fixed tariff?
No, not while the fix lasts. About 35 percent of households, around 11 million, are on fixed tariffs and are unaffected by this rise. When a fixed deal ends you normally move to the variable rate, so check the end date.
Why did Ofgem lower the typical energy use figures?
Ofgem says households use about 7 percent less electricity and 17 percent less gas than before. Money to the Masses reports the typical figures fell from 11,500 to 9,500 kWh of gas and from 2,700 to 2,500 kWh of electricity. On the old values, the October cap would have been £1,935.
Will energy bills rise again in January 2027?
Nothing is confirmed, and Ofgem is expected to announce the next level late in the autumn. Money to the Masses reports that analysts expect a further rise of 12 to 14 percent, and supplier forecasts for January to March run from £1,932 to £1,970. Those are estimates, not official figures.
Is it worth fixing my energy tariff now?
It depends on your usage and appetite for risk. Ofgem says some fixes are £100 or more below the cap, but you could pay more than the variable rate if wholesale prices fall, and early exit fees may apply. Compare the full annual cost before deciding.
Where can I get help if I cannot pay my energy bill?
Contact your supplier first and ask about support, because the conversation is easier before arrears build up. You can also get free debt advice from MoneyHelper, StepChange and Citizens Advice.
