Energy price cap rises 4% from 1 October: £1,723 a year for a typical home
Ofgem lifts the cap from £1,663 to £1,723 a year — £60 more, about £5 a month. Gas is the driver, with its unit rate up almost 9%. Electricity barely moves, because VAT on it drops to zero on 1 October.
A new Ofgem price cap runs from 1 October to 31 December 2026. For a typical household on gas and electricity paying by direct debit it is £1,723 a year, against £1,663 now: a 4% rise, or £60 over the year — roughly £5 a month.
The new rates
Electricity: 26.32p per kWh and a 54.83p daily standing charge. Gas: 7.97p per kWh and 29.68p a day. These are averages across England, Wales and Scotland — your region, meter type and payment method move the numbers either way.
Your ad could be hereAdvertise hereThe key thing about the cap: it limits the unit rate and the standing charge, not the size of your bill. £1,723 is what a notional household with average consumption pays. Use more and you pay more; there is no "£1,723 cap" sitting on your account.
Why it is rising
Wholesale gas prices, driven by the conflict in the Middle East. The gas side of the bill adds about 8%, and the gas unit rate almost 9%. Electricity is nearly flat: its unit rate adds under a percent, and the daily standing charge actually falls, from 57.19p to 54.83p.
What VAT does
The brake is the government’s decision to cut VAT on domestic electricity to zero from 1 October 2026 until 31 March 2027, down from 5%. Ofgem estimates the cap would have been around £45 higher without it. Gas does not get the relief and stays at 5%. The VAT cut applies automatically, including to customers on fixed tariffs.
Who is unaffected
About 35% of households — roughly 11 million — are on fixed tariffs and the October rise does not touch them until their deal ends. MoneySavingExpert calculates the cheapest fixes are around 7% below the current cap and about 10% below October prices, so a standard variable tariff almost certainly loses. If you are already on a cheap fix, though, switching early usually costs more than it saves once exit fees are counted.
Ofgem announces the next cap on 25 November, for January to March 2027.
