The Energy Price Cap for October 2026 Explained

The Energy Price Cap for October 2026 Explained

The latest energy price cap for October 2026 has been announced by Ofgem, bringing more difficult news for nearly 13 million households as we head towards winter.

From 1 October 2026 to 31 December 2026, the energy price cap will rise by 4% for a typical household on a standard variable tariff. This is equivalent to an increase of around £60 a year, or £5 a month, if this level remained in place for a full year.

A 4% increase may not sound like a lot on its own, but it follows the massive 13% rise we saw in July. This means that by October, energy prices will be around 17% higher than they were back in April.

The timing is particularly concerning. July’s increase came during the summer, when households generally use less energy. So many households may not yet have felt the full impact of those higher rates. The latest rise will apply as the colder weather arrives and households begin using significantly more energy for their heating.

What Is the Energy Price Cap?

Set by Ofgem, the energy price cap limits the maximum unit rates and standing charges suppliers can charge customers on standard variable tariffs.

However, it’s important to remember that the price cap is not a limit on your total energy bill – actual costs depend on your usage.

The price cap is reviewed every three months. The October cap will remain in place until 31 December 2026, with the next cap covering 1 January to 31 March 2027, usually being announced late November.

Learn more about the Energy Price Cap update, including standing charges and unit rates for your region, here.

What About the Electricity VAT Cut Announced by the Government?

There is some good news. The Government is removing VAT from domestic electricity bills from 1 October 2026, lasting for six months until March 2027.

Without this intervention, Ofgem says the typical annualised price cap figure would have been around £45 higher.

Importantly, the VAT reduction means customers who are currently on fixed tariffs will benefit too.

The VAT cut has already been taken into account in Ofgem’s October price cap so you don’t need to do anything. Suppliers will automatically apply it to electricity bills.

However, gas will continue to have VAT charged at 5%. So, the impact on individual households will vary considerably depending on whether they use gas, electricity or both, and how much energy they consume.

Does the Price Cap Increase Affect You?

It’s important to remember that the energy price cap only applies to households on their supplier’s ‘standard variable tariff’, also known as the ‘default tariff’.

This is generally the tariff you’re on if:

• you’ve never switched to a fixed deal
• your previous fixed tariff has ended and you haven’t chosen another deal
• you’ve remained on your supplier’s default tariff

If you’re already on a fixed energy tariff, the October price cap increase will not change the rates you’re currently paying. Your agreed rates will remain in place until your fixed deal ends. If you don’t choose another tariff when your fix ends, you’ll be moved onto your supplier’s standard variable tariff, where the price cap will then apply.

Gas Users Could Feel the Biggest Impact

The changes aren’t equal across gas and electricity. Electricity prices will stay relatively stable, with the unit rate rising by less than 1% and the standing charge actually falling slightly.

Gas is where households will feel the biggest impact, with typical gas costs rising by around 8%. This means households that rely heavily on gas for heating could see their bills rise by considerably more than just the headline 4% increase.

Could Energy Prices Rise Again in January?

Unfortunately, yes, there could be even more pressure on household bills coming after Christmas.

Energy analysts at Cornwall Insight are currently forecasting that the energy price cap could rise by a further 9% in January 2027. Ongoing instability in the Middle East is continuing to keep wholesale energy markets inflated.

However, this is currently only a forecast. It has not been confirmed and wholesale energy markets can always change before Ofgem sets the next price cap in November.

With January right in the middle of winter, another huge increase would be particularly worrying for households already struggling with their energy costs and being able to heat their homes.

What Can You Do Now?

Fix your tariff if you can.

If you’re on a standard variable tariff, it’s absolutely worth comparing the fixed deals currently available particularly as Ofgem have said fixed tariffs are currently available at £100 or more below the October price cap, so it’s worth seeing for yourself whether fixing could save you money.

However, make sure you look at the unit rates, standing charges, length of the fix and any exit fees before making a decision.

If you’re already struggling with your energy bills, we really can’t stress this enough: now is the time to reach out for help. Don’t wait until the colder months arrive and your heating needs to go back on. Support may be available to help reduce your energy costs, maximise your household income and make your home warmer and more energy efficient. The sooner you ask for help, the more options you may have before winter hits.

What Home Energy Support Is Available?

LEAP (Local Energy Advice Partnership) is a completely free energy advice and money-saving service, helping households stay warm and reduce their energy bills.

LEAP takes a holistic approach to energy advice. Advisors can help you understand your energy bills and tariff, as well as look at ways to reduce your energy use.Depending on your circumstances, advisors may be able to help or refer you for further support, including income maximisation, benefits checks and other energy efficiency measures.

Crucially, LEAP can help you look at your tariff and explore whether you could save money by fixing or switching.

We are proud to deliver LEAP for residents in Peterborough, South Cambridgeshire and Rutland. However, LEAP is a nationwide service, so if you live outside these areas, make sure to check if LEAP is available in your region and take advantage of the free support on offer.

We have more info on LEAP below.

Do you live in Fenland, Huntingdonshire, Cambridge City or East Cambridgeshire?

Our parent charity, PECT, can help through its Cambridgeshire Home Energy Support Service (CHESS), in partnership with Cambridgeshire ACRE, thanks to funding from the Energy Industry Voluntary Redress Scheme. PECT are also offering this service to residents in Cambridge City in partnership with Cambridge City Council.

View our full guide to local energy grants and support here for more help.

LEAP (Local Energy Advice Partnership)

What Does LEAP Offer?

Eligibility:

LEAP is open to all types of householders – homeowners, private renters and social housing tenants. 

You may be eligible if your total annual household income is less than £31,000, or if you are in receipt of a means-tested benefit.

View full eligibilty here