Energy Price Cap Oct to Dec 2026: What It Means for Your Bill

The energy price cap went up by 4% on 1 October 2026, for the period to 31 December 2026. Ofgem says a typical household paying by direct debit for gas and electricity goes from £1,663 to £1,723 a year, which is £60 a year or about £5 a month more. Two things surprise people: the cap limits the price of each unit and the daily standing charge, so your total bill can still rise, and it only covers standard variable tariffs.

Here is what changed, what the cap does, and what you can do about your own bill.

What changed on 1 October 2026

Ofgem announced the new level on 26 August 2026:

• The change: a 4% increase in the cap for 1 October to 31 December 2026.
• For a typical household: £1,663 a year before, £1,723 a year after, paying by direct debit for gas and electricity.
• VAT: Ofgem’s announcement says “the Government’s decision to remove VAT from all domestic electricity bills is reflected in this update.”

Ofgem sets the cap level every 3 months, so the next change comes in the new year.

What the price cap actually limits

Ofgem describes the cap as the maximum your supplier can charge for a unit of energy and the standing charge together. The standing charge is the amount you pay every day, even on a day you use no energy.

What the cap does not do is limit your bill. In Ofgem’s words: “It does not limit the cost of your total bill.” The more energy you use, the higher your bill. The £1,723 figure is a typical household’s yearly cost at the capped prices; a bigger home, a colder winter or more people at home all push the real bill higher.

Are you covered by the cap?

The cap protects people on tariffs where the unit rate can go up or down with the energy market. Ofgem calls these standard variable tariffs. If you moved into a home and never chose a deal, Citizens Advice says you start on the supplier’s standard variable tariff through a “deemed contract”.

You are not covered by the cap if:

• you have agreed a fixed tariff with your supplier
• you have a business energy contract
• you get heat from a heat network or use heating oil

If you are on a fixed tariff, your unit price is set by your deal for its term. The cap rising does not change it.

Is a fixed deal worth it?

In its October announcement, Ofgem said some fixed tariffs were available at “£100 or more below the October price cap”. Whether a fix suits you depends on the deal, its exit fees and how long it runs, so compare the full terms before you switch.

Why your rates depend on how you pay

Ofgem notes that the cap level and the standing charge can vary by payment method: direct debit, standard credit or a prepayment meter. The cap includes what Ofgem calls a levelisation allowance, “making sure prepayment and Direct Debit customers pay the same standing charge”. The headline £1,723 figure is for a typical household paying by direct debit, so check your own supplier’s rates for the way you pay.

Check your direct debit and your credit

If you pay for energy by monthly direct debit, it is worth checking two things after a price change.

1. Is your direct debit right for your usage?

Send your supplier an up-to-date meter reading, then look at your account. If your direct debit looks too high or too low for what you actually use, ask the supplier to review it.

How to give a meter reading:

1. Find your gas and electricity meters.
2. Write down the numbers shown, including any leading zeros. If your electricity meter shows two rows, note both.
3. Take a photo of each meter with the date.
4. Submit the readings in your supplier’s app or online account.

If you have a smart meter, check your account to see whether your supplier already has a recent reading.

2. Are you in credit?

If you have paid more than you have used, your account is in credit. Citizens Advice says you can claim that credit at any time. You will need to give your supplier an up-to-date meter reading.

Citizens Advice also gives a sensible warning: you should probably leave money on your account during summer and autumn to cover higher energy costs in winter. Taking all your credit back in October can mean a shortfall in January.

If your supplier says no to a refund, they must explain their decision. Suppliers can refuse for good reasons, for example when you only have a small credit built up over the summer.

If you are struggling to pay

Ofgem urges anyone struggling to reach out to their energy supplier as soon as possible. Energy bills are a priority debt in England: Citizens Advice notes your supplier might cut off your supply if you do not pay, so deal with them before most other debts. Our guide on which bills to pay first explains the order.

Keep the new amount on your bill list

When your energy direct debit changes, update your bill list the same day so the new amount does not surprise you. A bill tracker such as Billo keeps your energy bill alongside all your other bills, with its date and amount, and reminds you 3 days before it leaves your account.