Millions of households across England, Scotland and Wales will pay more for gas and electricity this winter after Ofgem confirmed its energy price cap will rise 4% from October 1, taking the typical annualised Direct Debit bill from £1,663 to £1,723.
The £60 increase arrives as households begin using more heating. Higher wholesale energy costs have outweighed savings from the Government’s electricity VAT cut, making the October change particularly important for winter budgets.
How much is the October 2026 energy price cap?
For October 1 to December 31, Ofgem’s annualised figures for typical consumption are:
- Direct Debit: £1,723, up from £1,663
- Standard credit: £1,861, up from £1,796
- Prepayment: £1,678, up from £1,620
- Economy 7 Direct Debit: £1,046, up from £1,039
For a typical Direct Debit household, the increase works out at about £60 a year or £5 a month when averaged across 12 months.
But £1,723 is not a maximum bill. Ofgem caps unit rates and standing charges, not total spending. Households that consume more energy will pay more.
What counts as a typical household?
Ofgem changed its Typical Domestic Consumption Values in July 2026 to reflect falling household energy use. Its medium-use calculation now assumes around 2,500 kWh of electricity and 9,500 kWh of gas annually.
Under the previous consumption assumptions, October’s cap would be equivalent to about £1,941. This matters when comparing the latest figure with older price caps.
Households can compare the change with the July 2026 UK energy price cap and household bill changes.
Why are energy bills rising?
Wholesale energy is the main pressure. Ofgem says its wholesale-cost allowance has increased 11% and now accounts for around 47% of the total cap.
Middle East instability has contributed to uncertainty in global gas markets. European heatwaves have also increased electricity demand for cooling, while periods of low wind generation can increase reliance on gas-fired power.
Ofgem’s wholesale allowance for gas increased 13%, while its electricity allowance rose 10%.
What are the new gas and electricity rates?
For Direct Debit customers on standard variable tariffs, the Great Britain average electricity rate from October will be around 26.32p per kWh, with an electricity standing charge of about 54.83p a day.
Gas will average around 7.97p per kWh, with a standing charge of approximately 29.68p a day.
Rates vary by region, meter and payment method, so customers should check their own tariff. Ofgem provides official energy price cap unit rates and standing charges for consumers.
Why are bills rising despite the electricity VAT cut?
From October 1, VAT on domestic electricity is being reduced from 5% to zero until March 31, 2027. The measure is expected to reduce the annual price cap by roughly £45.
The reduction applies to electricity rather than gas and is expected to benefit fixed-tariff customers too. However, higher wholesale costs have more than offset the saving, leaving the overall cap higher.
Who is affected?
The cap primarily applies to households on default or standard variable tariffs in England, Scotland and Wales. Northern Ireland has a separate energy market and is not covered by Ofgem’s Great Britain cap.
Customers already on fixed tariffs generally continue paying their contracted rates rather than automatically moving to the £1,723 headline level.
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What help is available this winter?
The Government says around six million households will receive the £150 Warm Home Discount this winter. Customers struggling to pay should contact their supplier early to discuss available support or repayment arrangements.
The October increase also comes as energy costs continue to put pressure on household finances. For wider context, see how rising energy bills are affecting UK inflation and household costs.
Could energy bills rise again in January 2027?
October may not be the final increase households face this winter. Cornwall Insight currently forecasts another 9% increase to around £1,872 for January to March 2027, about £149 above October’s level.
That is a forecast, not a confirmed Ofgem figure. Wholesale prices, winter weather, European gas storage and geopolitical developments could change the outlook before the next cap is set.
What should households do before October 1?
Check whether your tariff is fixed or variable, compare your unit rates and standing charges, and consider submitting an accurate meter reading around the October 1 changeover.
If considering a fixed deal, compare unit prices, standing charges, contract length and exit fees rather than assuming a fixed tariff will automatically save money.
Most importantly, calculate winter costs using your own consumption. The £1,723 figure represents a typical annualised bill; your actual bill depends on how much gas and electricity you use.
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