Ofgem’s energy price cap will rise by 4% on 1 October, taking the typical annualised bill for a dual-fuel household paying by Direct Debit from £1,663 to £1,723.
That is an increase of £60 a year, or about £5 a month, if the new rates remained in place for 12 months. They are actually set for three months, from 1 October to 31 December 2026, and will affect around 22 million households on default tariffs in England, Scotland and Wales.
The £1,723 figure is not a limit on anyone’s total bill. Ofgem caps the unit rates and daily standing charges suppliers can apply, so households that use more energy will still pay more.
Gas accounts for most of the October increase
For a typical household paying by Direct Debit, Ofgem says gas costs will rise by around 8%. Homes that do not use gas should see a much smaller increase of less than 1%.
The national average Direct Debit rates will change as follows:
- Electricity unit rate: 26.11p to 26.32p per kilowatt hour (kWh).
- Electricity standing charge: 57.19p to 54.83p a day.
- Gas unit rate: 7.33p to 7.97p per kWh.
- Gas standing charge: 29.04p to 29.68p a day.
These are averages across Great Britain. Your actual rates depend on your region, payment method and meter type, so the figures shown on your supplier’s tariff notice may differ.
Ofgem said higher wholesale gas prices, linked to continuing conflict in the Middle East and volatile global markets, were the main reason for the rise.
Electricity VAT removal prevents a larger rise
The government’s temporary removal of VAT from domestic electricity is included in the October cap. Ofgem estimates the typical annualised figure would have been around £45 higher without it.
Electricity bills are therefore expected to remain broadly stable even though wholesale costs have increased. The VAT change will also be applied automatically to fixed tariffs, so customers do not need to claim it.
Who will be affected by the new price cap?
The change applies to households on standard variable or default tariffs. Ofgem estimates about 35% of households — roughly 11 million — are on fixed deals and will not be affected by the cap increase while their fixed rates continue.
The cap does not cover Northern Ireland, which has a separate energy market. It also does not protect business contracts, heat-network customers or households that use heating oil.
Customers on a variable tariff do not need to apply for the new rates. Suppliers will update them automatically from 1 October.
Why the £1,723 figure looks lower than older price caps
Ofgem changed its definition of a typical household in July after estimating that average use had fallen. Its new benchmark assumes annual use of 2,500kWh of electricity and 9,500kWh of gas.
This means the £1,723 headline figure cannot be compared directly with older cap figures based on higher consumption. On the previous benchmark, Ofgem says the same October rates would produce an annualised bill of £1,935, up from £1,862 under the current rates.
Energy consultancy Cornwall Insight described the October level as the highest in three years on a like-for-like basis.
Check the rates rather than the headline figure
Ofgem says fixed tariffs are available at £100 or more below the October cap, but fixing means your unit price will not fall if variable rates later drop. Exit fees and your own energy use also matter when comparing deals.
You can use Ofgem’s regional price-cap tables to check the unit rates and standing charges for your area and payment method. Anyone struggling to pay should contact their supplier, which must discuss support such as an affordable repayment plan.