Energy price cap October 2026: how it works (£1,723)

Last updated: Sunday 27 September 2026 (Europe/London).

Answer first (27 Sep 2026): The Ofgem price cap limits unit rates and standing charges on default tariffs — it is not a bill ceiling. For 1 October–31 December 2026 the typical dual-fuel Direct Debit illustration is £1,723 (new TDCV 2,500 kWh electricity / 9,500 kWh gas). July–September was £1,663 on the same new TDCV (or £1,862 on the old presentational TDCV). Fixes can beat the cap. Compare on the energy hub.

For the full October rates write-up see energy price cap October 2026.

The energy price cap for 1 October–31 December 2026 is £1,723 a year for a typical dual-fuel household paying by Direct Debit — up about 4% (£60) from the July–September new-TDCV figure of £1,663. Ofgem sets this cap every three months, and it limits the unit rate and standing charge suppliers can charge on default tariffs, not your total bill. If you use more energy than a typical household, you pay more, regardless of the cap level. This guide covers the current October rates, how the cap is calculated, what July looked like historically, and whether fixing your tariff now makes sense.

What Is the Energy Price Cap?

The energy price cap is a limit on the unit rates and daily standing charges suppliers can charge customers on standard variable tariffs (SVTs), the default tariff you land on once a fixed deal ends. Ofgem, the UK energy regulator, sets the cap and reviews it four times a year, in January, April, July, and October. The cap does not fix your total bill. It fixes the price per unit. A household using more gas and electricity than average pays more than the headline figure, even under the same cap. Around 22 million accounts, roughly 40% of the market, currently sit on fixed tariffs and stay unaffected by cap changes until their deal ends.

Current Price Cap Rates for October–December 2026

From 1 October to 31 December 2026, a typical Direct Debit dual-fuel household pays these Great Britain average rates:

• Electricity unit rate: 26.32p per kWh (0% VAT from 1 Oct 2026–31 Mar 2027)

• Electricity standing charge: 54.83p per day

• Gas unit rate: 7.97p per kWh (5% VAT included)

• Gas standing charge: 29.68p per day

These rates illustrate an annual bill of £1,723 at Ofgem’s medium TDCV (2,500 kWh electricity / 9,500 kWh gas). Electricity unit rates edged up from July’s 26.11p/kWh while the electricity standing charge fell (54.83p/day vs 57.19p/day), helped by the temporary cut of VAT on household electricity to 0% from 1 October 2026 to 31 March 2027. Gas sits at 7.97p/kWh + 29.68p/day with 5% VAT included.

July–September 2026 (historical): electricity 26.11p/kWh + 57.19p/day; gas 7.33p/kWh + 29.04p/day. Old-TDCV presentational bill £1,862; new-TDCV bill £1,663. Unit rates were identical either way — only the assumed usage differed.

How the Price Cap Works

Ofgem calculates the cap using five cost categories: wholesale energy (roughly 45% of a typical bill), network costs, operating costs, policy costs, and supplier margin. Wholesale costs drive most of the movement between reviews, because Ofgem sets each cap using an assessment period that ends about six weeks before new rates start. The October 2026 cap rested on wholesale prices between 19 May and 18 August 2026. Suppliers cannot charge above the cap on default tariffs, though they can charge less. Fixed tariffs sit outside the cap entirely, so a supplier can price a fixed deal above or below the current level. Prepayment meter customers get a separate cap calculation that reflects the higher cost of serving that group. Business energy customers get no domestic-style cap protection at all.

Price Cap History: 2026 so far

The cap has moved sharply within a single year (figures on the basis shown):

• January 2026: £1,758 (old TDCV basis)

• April 2026: £1,641 (old TDCV basis)

• July–September 2026: £1,663 new TDCV / £1,862 old-TDCV presentational

• October–December 2026: £1,723 new TDCV / £1,935 old-TDCV presentational

The July swing reflected volatile wholesale gas prices tied to Middle East supply risk. Even at today’s levels, typical bills sit well below the 2022 crisis peak, when the Energy Price Guarantee capped typical bills at £2,500.

Price Cap Rates by Payment Method (Oct–Dec 2026)

Your payment method changes what you pay under the same cap. For October–December 2026 at the new TDCV, a typical dual-fuel household pays about £1,723 by Direct Debit, £1,861 on standard credit (cash, cheque, or quarterly billing), and £1,678 on a prepayment meter. Economy 7 Direct Debit typical electricity-only sits around £1,046. Standard credit costs more because suppliers face higher costs billing and collecting outside Direct Debit. Switching to Direct Debit from standard credit is one of the simplest ways to cut your bill without switching supplier at all.

Regional Differences Under the Price Cap

The cap sets a national average, but actual unit rates and standing charges vary by region to reflect local network and infrastructure costs. Households in Merseyside and North Wales pay noticeably more than the England, Scotland, and Wales average, while those in the East Midlands pay less. The gap comes down to the cost of maintaining and upgrading the electricity and gas networks in each region, not the supplier you choose. Two households on the same tariff, same usage, and same supplier can still see different bills purely because of postcode.

October 2026 is confirmed — pre-announcement forecasts are superseded

Ofgem has set the October–December 2026 typical dual-fuel Direct Debit figure at £1,723 (announced 26 August 2026). Earlier supplier and analyst forecasts — including E.ON Next at £1,747, EDF and British Gas around £1,760, Cornwall Insight near £1,899, and later Cornwall / uSwitch figures around £1,729 / £1,725 — are superseded pre-announcement forecasts only. Do not treat them as the live cap. The next announcement is due 25 November 2026 for the January–March 2027 period.

Why Wholesale Gas Prices Drive the Cap

Wholesale gas sets the direction of the cap because gas-fired power stations set the price of electricity on the grid for much of the year. When gas costs rise, electricity costs follow, even for the renewable share of generation. The UK imports a large share of its gas, so global supply shocks pass through to bills faster than in countries with more domestic production or storage. Storage levels, weather forecasts, and the pace of Asian demand for liquefied natural gas all feed into where the next quarterly cap lands.

Does the Price Cap Apply to Business Energy?

No. The cap only protects domestic customers on default or prepayment tariffs. Business gas and electricity contracts sit outside the cap entirely, so a supplier can set a business rate however it likes once a contract ends or lapses. Companies that let a fixed deal roll onto an out-of-contract rate often pay substantially more than they would on an open-market fixed tariff.

Should You Fix Your Energy Prices Now?

It depends on your risk tolerance and the deals available in your area. Compare any fixed quote against the £1,723 SVT sketch (and your own usage), not against superseded October forecasts. Fixing suits households that want bill certainty over the next 12 to 24 months. It suits variable-rate households less well if wholesale prices fall sharply before the fixed term ends. Compare fixed and variable energy deals side by side before deciding, and check for exit fees on any fixed contract under consideration.

How to Prepare for Cap Changes

Take these five steps around each quarterly reset:

1. Submit a meter reading on the last day of the old quarter so your bill splits accurately between rate periods.

2. Compare fixed tariffs against the current £1,723 illustration and your real kWh use.

3. Check eligibility for the Warm Home Discount and other support schemes if you're on a low income or have a health condition affected by cold homes.

4. Review your Direct Debit amount with your supplier if your account is building a large credit or debit balance.

5. Contact your supplier early if you're falling behind on payments — suppliers must offer a repayment plan before considering disconnection.

The Bottom Line on the October 2026 Price Cap

The current typical dual-fuel Direct Debit figure is £1,723 for October–December 2026. July’s £1,862 / £1,663 figures are historical. Staying on a standard variable tariff means riding quarterly rises and falls. Fixing removes that uncertainty at today’s quoted rates — if a fix genuinely beats the £1,723 sketch for your usage.

Compare gas and electricity deals on Switch to see fixed and variable tariffs ranked for your postcode. Ofgem's official price cap page has the full breakdown of unit rates and standing charges by region.

Frequently Asked Questions

What is the current energy price cap?

For 1 October–31 December 2026 it is £1,723 a year for a typical Direct Debit dual-fuel household at the new TDCV (2,500 / 9,500 kWh). July–September was £1,663 on the same new TDCV (or £1,862 on the old presentational TDCV).

Will energy prices go down in 2026?

October–December is confirmed at £1,723 (up vs July’s new-TDCV £1,663). The next uncertainty is January–March 2027, announced on 25 November 2026.

Is now a good time to fix energy prices?

Compare any fix against the £1,723 SVT sketch and your real usage. Households planning to stay put for 12 months or more gain the most certainty from a competitive no- or low-exit-fee fix.

When is the next energy price cap announcement?

Ofgem announces the January–March 2027 cap on 25 November 2026, with new rates taking effect on 1 January 2027.

Does the price cap apply to businesses?

No. Business gas and electricity contracts carry no domestic price-cap protection. Rates depend entirely on your contract and supplier.

Are energy prices going up or down in October 2026?

October–December is set at £1,723 — up about 4% from July’s new-TDCV £1,663. Pre-announcement forecasts from E.ON, Cornwall Insight and others are superseded.

How is the energy price cap calculated?

Ofgem combines wholesale energy costs (around 45% of the total), network costs, policy costs, operating costs, and supplier margin, using a three-month assessment period that ends roughly six weeks before each new cap takes effect.

Does switching cut off my energy?
Supply continues. The switch is an account change, not a physical disconnection.

Where should I compare deals?
Start at switchsquid.com/energy for homes.

Is the cap my bill?
No. Higher use means a higher bill even under the same capped unit rates.