Energy Price Cap October 2026: What the £1,723 Rise Means for UK Bills
Ofgem’s October 2026 energy price cap rises 4% to £1,723. See what changes for UK gas and electricity bills, standing charges and tariffs.
Ofgem has confirmed that the energy price cap will rise by 4% from 1 October 2026. For a typical dual-fuel household paying by Direct Debit in England, Scotland or Wales, the headline annual figure will increase from £1,663 to £1,723. That is £60 more over a year, or roughly £5 a month, based on Ofgem’s typical-use example.
The figure is useful for comparing the direction of bills, but it is not a fixed bill and it is not a maximum that every household will pay. Your actual cost will depend on how much energy you use, where you live, your meter and payment method, and whether you are on a default or fixed tariff.
What changes from 1 October 2026?
The new cap applies from 1 October to 31 December 2026. It limits the unit rates and standing charges suppliers can charge customers on default tariffs, including standard variable tariffs. Ofgem’s £1,723 figure is an average for a typical dual-fuel Direct Debit customer across England, Scotland and Wales.
It does not mean every dual-fuel bill will be £1,723. A smaller home with low usage could pay considerably less, while a larger or poorly insulated home could pay more. In practice, the meter readings and rates on your account matter more than the headline example.
Why is the October energy price cap rising?
Ofgem says the main pressure behind the increase is higher wholesale gas prices. Its announcement says wholesale costs rose by 11% over the three months used for this cap-setting period, with the increase linked to continuing uncertainty around the conflict in the Middle East.
There is also a temporary change to tax. Domestic electricity bills will have zero VAT from 1 October 2026 until 31 March 2027. Domestic gas remains subject to 5% VAT. That electricity change helps offset some of the wider pressure on household bills, but it does not remove the price-cap increase altogether.
October 2026 unit rates and standing charges
The following are Ofgem’s average Direct Debit rates for the October-to-December cap period:
| Fuel | Unit rate | Standing charge |
|---|---|---|
| Electricity | 26.32p per kWh | 54.83p per day |
| Gas | 7.97p per kWh | 29.68p per day |
These are average figures, not a single nationwide tariff. Ofgem publishes different rates by region, payment method and meter type, and Economy 7 customers have separate day and night rates. Gas figures include 5% VAT; domestic electricity is subject to the temporary zero-VAT treatment described above.
Check the rates shown on your supplier bill or online account before estimating your own cost. The official Ofgem unit rates and standing charges page is the best place to compare the detailed figures for your region and payment method.
What the price cap does and does not mean
The cap restricts the maximum unit rates and standing charges for default tariffs. It does not cap the total amount a household can spend. If you use more kilowatt-hours, your bill rises; if you use less, it falls.
The cap also does not normally apply to fixed-term tariffs. A fixed deal has its own agreed rates for the length of the contract, although exit fees and other terms may apply. Ofgem said in its announcement that fixed deals priced below the cap were available in the market, but the right choice depends on the tariff’s full cost, contract length and your expected usage.
Who will be affected?
- Default or standard variable tariff customers: their unit rates and standing charges will generally change when the new cap begins.
- Direct Debit customers: the £1,723 headline example is based on this payment method.
- Standard credit customers: rates are usually different from Direct Debit rates and can be higher.
- Prepayment customers: a separate cap applies, so do not use the Direct Debit figure to estimate a prepayment bill.
- Fixed-tariff customers: their agreed rates are generally unaffected by this quarterly cap change.
Northern Ireland operates under a different energy-market system, so the Ofgem figures in this article are for England, Scotland and Wales.
What should you do before October?
There is no need to panic over the headline number, but a short check can prevent surprises:
- Find your current unit rates and standing charges. Look at a recent bill rather than relying on an estimated annual amount.
- Take a meter reading around 1 October. Sending a reading to your supplier helps separate usage before and after the new rates, unless your smart meter does this automatically.
- Compare the whole tariff, not just the monthly estimate. Check the unit rates, standing charges, fixed-term length, exit fee and any conditions before switching.
- Check whether your payment method still suits you. Direct Debit can have different rates from standard credit or prepayment, but choose a method you can manage reliably.
- Contact your supplier early if affordability is becoming a problem. Waiting until an account is seriously behind can make support harder to arrange.
Energy efficiency can also reduce the amount you pay, because the cap applies to each unit of energy rather than guaranteeing a lower total bill. Focus first on practical changes you can afford and on the rooms and appliances that use the most energy.
What help is available if you cannot afford your bill?
Speak to your supplier as soon as possible. Suppliers can discuss repayment arrangements and, for prepayment customers, options such as emergency credit. Do not ignore bills or rely on an unverified social-media claim about a new grant or rebate.
For an explanation of how the cap and standing charges work, use Ofgem’s price-cap and standing-charge guidance. You can also read UK Markets Today’s guide to the Energy Bills Support Scheme and what replaced it, while remembering that older support schemes should not be assumed to continue in 2026.
October 2026 energy price cap FAQs
Is £1,723 the maximum energy bill?
No. It is Ofgem’s typical-use annual example for a dual-fuel Direct Debit household. Your bill depends on your energy use, region, meter and tariff.
Does the cap apply to a fixed tariff?
Generally, no. A fixed tariff has agreed rates for its contract period, but check your specific terms and any exit fee.
Will every UK household pay the same amount?
No. The published figures vary by region, payment method and meter type, and Northern Ireland has a different system. Even households on the same tariff can have different bills because they use different amounts of energy.
Will the VAT change make electricity cheaper?
Domestic electricity will be charged at zero VAT from 1 October 2026 to 31 March 2027. Domestic gas remains at 5% VAT. The change may reduce part of the bill, but it does not mean the total bill will fall for everyone.
When will the price cap change again?
Ofgem reviews the cap every three months. The next figure will depend on the costs used for that review, so it is not sensible to predict it from the October number alone.
The bottom line
The October 2026 cap means a typical Direct Debit dual-fuel household in Great Britain faces a £60-a-year increase in the headline example, taking it to £1,723. The most useful response is to check your own rates and usage, read your meter around the changeover, compare fixed and variable options carefully, and contact your supplier early if you need help.
Sources: Ofgem’s October 2026 announcement and its detailed explanation of the changes. Information checked before publication.
