Energy price cap to rise by 4% from October 2026

The average household will pay £1,723 a year, mostly as a result of the price of gas

The energy price cap is rising by 4% at the next price cap, going up by £60 per year for the average household. This will increase bills by around £5 per month. This only applies to those who are on a standard tariff, so if you have a fixed rate, you’ll be locked in at the price you fixed at.

Here’s what you need to know about the cap and how much you’ll pay.

Some articles on the site contain affiliate links, which provide a small commission to help fund our work. However, they won’t affect the price you pay or our editorial independence. Read more here.

How the energy cap works

The energy price cap is a limit set every three months by Ofgem, the government’s energy regulator. It restricts how much an energy company can charge customers.

The cap applies to the price of your gas and electricity on your energy company’s default or standard variable rates. These basically can go up and down whenever the energy company likes. With the cap, the energy companies have to make sure their tariffs aren’t higher than the set rate.

Despite its name, it’s not a maximum amount that you can pay for your energy. Instead, the prices set on the cap are the maximum price per unit of energy you use. Ofgem announces the figure as an annual price, as you probably don’t have a clue how many kWh of energy your family uses. 

Because of this, the quoted “cap” (£1,723) is an annual price based on a typical household. If you use more energy, you’ll pay more than the cap every year. Use less, and you’ll pay less.

There are separate caps for gas and electricity, and each cap is also made up of a standing charge (a set amount each day, regardless of whether you use any energy) and a usage charge. 

The cap will also vary depending on where you live in the UK. Prepayment caps used to always be a little higher, although this recently changed. The new energy price cap also applies to those with a prepayment meter. 

Crucially, if you’re on a fixed-rate deal, then the cap doesn’t apply and the price you pay won’t change until that fix ends.

What is the new energy price cap?

The latest announcement is a rise to the price cap from 1 October until 31 December 2026.

The new cap for a “household with average use” is £1,723 a year. This is up by £60, or 4% from the current rate.

If you break it down to each actual unit cost, the average caps are:

This does vary based on where you live, though the Ofgem website has a full breakdown of the regional caps for all standing charges and units.

What is the new average monthly energy bill?

Despite Ofgem attempting to present the information in a way we understand, the total annual cap figure isn’t always the easiest to comprehend – especially since our energy use changes throughout the year, but this cap only applies to three months.

At the same time, it’s not a flat increase to all bills as there could be different percentage changes to standing charges and unit rates.

So we think it’s easier to understand the price cap when you view it as a monthly direct debit. Your energy company calculates this by taking the predicted cost for a year based on your previous energy usage and dividing it by 12. It’s not 100% accurate, but it’s a handy comparison.

As the cap is up by £60 per year, that makes it around £5 more each month. The average monthly bill will be around £144.

What is the current energy price cap?

The current price cap (1 July to 30 September) is £1,663 a year, based on the average household. This is with the newer typical use figures.

When will the new prices start?

This new energy price cap will come into play on 1 October 2026 and will remain in place until 31 December 2026.

How much will you pay under the new energy price cap?

Remember, the price cap figures are based on average use. If you use more than this average, you’ll pay more; if you use less, you’ll pay less. Plus, it can vary regionally, so you’ll need to check where you live to see exactly what it’ll be for you.

If you want to get a rough, quick idea, you can add 4% to what you pay at the moment. This doesn’t take into account the balance between unit and standing charges, or whether you’ve got an accurate direct debit set-up, but it could give you a sense of how much it’ll be.

Get the best of our money saving content every week, straight to your inbox

Plus, new Quidco customers get a high paying £18 welcome offer

Email Address

I agree to receive email updates and promotions.

Will you pay more or less money with the new energy price cap?

If you’re on a variable tariff

Broadly, anyone on a standard tariff will be charged more per unit of energy from 1 October 2026. Of course, the bill itself will be based on your actual energy use. 

If you’re on a prepayment meter

There is no longer a significant premium for those with prepayment meters. You can see the cap for your region on the Ofgem website.

If you’re already on a fixed tariff

If you’re fixed on a tariff, your prices usually don’t change when the price cap changes. That’s because you’ve already agreed on a price per unit of energy for a fixed length of time with your energy supplier, usually 12 months.

For April’s price cap change, the prices fell for everyone due to an end of funding for the Energy Company Obligation scheme and removing 75% of costs for the Renewables Obligation scheme from energy bills. This time, they’ll only go up for those not on a fixed tariff.

Should you fix your energy?

We’ve seen more fixed deals returning to the market in the last couple of years, but as a result of the conflict in the Middle East, wholesale energy prices remain high.

However, there are currently 14 energy deals that beat the price cap but the price of these tariffs depends on where you live. We’d say it’s still worth checking them out to see if you’ll save.

At the moment, the cheapest fixed tariff is an 18-month deal from Fuse Energy that costs £1,574 a year for the average household – £89 below the current July cap and £155 below the predicted October price cap, according to comparison site Uswitch.

You’ll be comparing prices based on the price cap now, rather than the October one, so make sure you consider that.

If you go for one of these, bear in mind that some will charge an exit fee if you want to swap suppliers before the end of the term.

There are also some tariffs that track at below the cap, so you’ll always pay less – but not necessarily less than a fix.

Of course, these can change, so it’s worth using a comparison site to see what rates are available.

Will bills go up again?

They could well do. The current predictions suggest that the price cap could see further rises next year, but a lot can change in that time.  

Featured investing offer

eToro Free £50 in fractional shares

Customer rating 3.8/5

• Offer

  free £50 in fractional shares*
• Annual fee

  £0
• Investment styles

  Shares, funds or ready-made portfolios
• Minimum deposit

  $50

Invest in a general investment account or stocks and shares ISA (additional fees apply)

• FSCS Protected? Yes
• Interest on uninvested cash 3% on balances up to $50,000, 3.8% on balances over this
• Fractional shares Yes
• Foreign exchange fee 0.7%
• Fund fees If you invest in funds, you'll have to pay fund fees, which cost on average ~0.16% per year, with additional market-spread effects up to 0.05%
• Offer You need to sign up, verify your account and deposit at least £200 to get the free assets. ISA deposits aren't included in the £200 requirement to get the offer.
• Authorised and regulated by the Financial Conduct Authority Yes, FRN 583263
• Risk warning The value of your investments may go up or down. Your capital is at risk. ISA powered by Moneyfarm. ISA rules apply. UK residents only.
• Accounts available General investment account, stocks and shares ISA (additional fees apply)

View Deal

When is the next price cap change?

The price cap is reviewed every three months (before October 2022, it was every six months).

The price cap will next change on 1 January 2027, and will be announced by 25 November. After this, it’ll change again on 1 April 2027, a change that will be announced in February 2027.

How you can reduce your bill

Paying by direct debit will reduce your bills, so it’s well worth doing this.

Otherwise, it’s hard to do much to reduce what you spend on energy other than by using less energy. The standing charges will still apply, and bills will still be sky-high, but cutting back on gas and electricity will mean you pay less.

It’s worth giving accurate meter readings if you’re not on a smart meter. This will mean you’re more likely to have an accurate direct debit on current use, rather than what you used last year, and it stops you from falling into debt on your energy account. Your energy firm will probably not change this automatically, so you might need to ask.

Don’t forget, a direct debit averages the spend out over the year, so you should hope to overpay in the summer and underpay in the winter to help even out your bills.

How has the price cap changed?

As you can see, the really big changes have happened since October 2021. Before this, the average direct debit was under £100, so even with recent cuts, we’re still paying more, and even more on top if you had been saving with a lower fixed-rate deal.

These are the energy price caps going back to 2019, we’ve roughly adjusted them for the new typical use figures. You can see the historical price caps with the old figures below.

Historical energy price caps

These are the energy price caps from before the typical use figures changed. This change made it difficult for us to compare new caps with the old ones, so we’ve converted the old price caps into ones with the new typical figures above.

Related Posts:

Energy price cap to rise by 13% from July 2026

Energy bills: how to get the best price