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The energy price cap October 2026 at a glance
The energy price cap October 2026 has just been confirmed by Ofgem — and it's rising, not falling. From 1 October to 31 December 2026, typical dual-fuel Direct Debit bills go up by around 4%, despite electricity losing its 5% VAT the same day. Here's what's actually changed, and how to check what it means for your own home.
For 1 October–31 December 2026, Ofgem's default tariff cap sets:
- Electricity: 26.32p/kWh, standing charge 54.83p/day — VAT-free (0%) this quarter
- Gas: 7.97p/kWh, standing charge 29.68p/day — still includes 5% VAT
What the new price cap figures mean for you
These are GB averages across England, Scotland and Wales for a typical Direct Debit household; Ofgem also publishes regional variations, so yours may differ slightly. Northern Ireland runs a separate energy market and isn't covered by this cap.
Widely reported figures following the announcement put the average dual-fuel bill at around £1,723 a year, a rise of roughly £60, or 4%. That's not an Ofgem figure as such, and it's worth remembering what the cap actually limits: your unit rates and standing charges, not your total bill. Use more energy than a "typical" household and you'll pay more than £1,723; use less and you'll pay less.
Why your bill still rises despite the VAT cut
This is the part most headlines get muddled. From 1 October, electricity covered by the price cap loses 5% VAT — a cut Ofgem states runs from 1 October 2026 to 31 March 2027. So the new electricity standing charge (54.83p/day) looks lower than the old one (57.19p/day), and the new unit rate (26.32p/kWh) looks barely different from the old one (26.11p/kWh).
Look closer and it's the opposite. Those old figures included 5% VAT; the new ones don't. Strip VAT out of the old numbers for a fair comparison: 57.19p becomes roughly 54.47p, and 26.11p becomes roughly 24.87p. Against that, the new standing charge is essentially flat, and the underlying electricity unit rate has actually risen by around 6%. The VAT cut is real money — it's just being absorbed by an underlying price rise.
What's really driving the rise: gas
Gas gives the honest comparison, because VAT stayed at 5% in both quarters, so the figures are directly comparable. The gas unit rate has risen from 7.33p/kWh to 7.97p/kWh — a genuine increase of around 9%, driven by wholesale costs. That's the real engine behind the overall 4% rise, not electricity.
Standing charges are fixed daily costs that apply whether or not you use any energy, which is why always-on appliances feel them keenly. Our free fridge freezer running cost calculator lets you check what yours costs at the new October rates.
Cheapest ways to cut your bill this winter
You can't reduce standing charges, but you can control usage. Only boil the water you need, run washing machines and dishwashers on full eco loads, and check which appliances are quietly costing the most. Our kettle cost calculator and washing machine cost calculator let you plug in the new rates and see the real cost per use.
Weighing up heating this winter? See our electric heater vs central heating cost comparison, and for more on the tax change itself, read our electricity VAT cut explainer.
Check what it means for you
Every home's bill depends on usage, tariff and region — the averages above are a starting point, not a prediction. Head to our Energy Tools hub to run your own appliances through the new October rates and see where your money's actually going this winter.
Results are estimates only — always check against your own bill or supplier.
This article explains a regulatory price cap and a tax change for general information only. It is not financial or tax advice, and TrimMyBills is not affiliated with Ofgem, HM Government or any energy supplier.
Frequently asked questions
Q: When does the new energy price cap take effect? A: The October 2026 cap runs from 1 October to 31 December 2026, replacing the July–September cap. A new cap will follow for January–March 2027.
Q: Why is my standing charge going down but my bill going up? A: The electricity standing charge fell mainly because VAT was removed, not because the underlying charge dropped — once you strip out VAT for a fair comparison, it's roughly flat. Gas costs rose enough to push the overall bill up 4%.
Q: Does the price cap apply in Northern Ireland? A: No. Northern Ireland has a separate energy market and isn't covered by Ofgem's GB price cap. The electricity VAT cut doesn't apply directly there either, as different VAT rules apply; the Northern Ireland Executive instead receives comparable funding.
Q: Does the price cap limit my total bill? A: No. It caps the unit rates and standing charges suppliers can charge, not what you pay overall — your bill still depends on how much gas and electricity you use.
Q: Is the £1,723 typical bill figure guaranteed? A: No. It's a widely reported average for a typical dual-fuel household on Direct Debit, based on assumed usage. Your own bill will differ depending on your actual consumption, tariff and region.
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Use our free calculator to get an estimate for your exact situation, then keep the result handy whenever you need it.
Open the fridge freezer running cost calculatorRelated next steps
- Open the kettle cost calculator
- Open the washing machine cost calculator
- Read: electric heater vs central heating cost UK
- Read: electricity VAT cut October 2026 explainer
- Browse the Energy Tools hub
Results are estimates only - always check against your own bill or supplier.