Switching Energy in 2026: What the £1,723 Cap Means

Last updated: Thursday 29 October 2026

For the current Ofgem cap, unit rates and past quarters, see our energy price cap page.

In short: From 1 October to 31 December 2026, Ofgem’s typical dual-fuel bill paid by Direct Debit is £1,723 a year, about 4% more than the £1,663 for July to September (Ofgem, 26 August 2026). That figure is for typical use, about 2,500 kWh of electricity and 9,500 kWh of gas, not your own bill. For most households the useful question is whether a switch saves money at your usage.

What changed on 1 October 2026

From 1 October to 31 December 2026, default (standard variable) tariffs are capped at the new rates. Ofgem’s Great Britain Direct Debit averages are 26.32p/kWh and 54.83p a day for electricity, and 7.97p/kWh and 29.68p a day for gas (Ofgem). The electricity figures include 0% VAT, which runs from 1 October 2026 to 30 June 2027 (HMRC Notice 701/19); the gas figures include 5% VAT.

If you are on a fixed deal, the cap does not change your contract. If you are on a default tariff, you pay the capped rates unless you switch to a different deal.

The figures at a glance

£1,723 divided by 12 is about £144 a month for a typical home. Low users pay less; larger homes and homes with electric heating pay more. Use 12 months of your own kWh, or your best yearly estimate, before you trust any savings figure.

Should you switch now?

• On a default tariff with no exit fee: get quotes for your postcode and usage. If a fixed deal costs less than the capped rates over the first year, after any introductory credits, switching now can lock in rates before the coldest months.

• On a fixed deal with an exit fee: work out the exit fee first. A deal that saves £80 in the first year but costs £120 to leave is not worth it.

• Already on a good fixed deal: you can compare once, but do not switch for a few pounds, especially if the new deal’s price after its term looks poor.

Important conditions

• £1,723 is Ofgem’s typical Direct Debit figure, not a guarantee of your bill.

• Standing charges and unit rates vary by region and payment method (Direct Debit, standard credit or prepay).

• Fixed deals are outside the cap, so check the term, exit fees and what happens when the deal finishes.

• The Warm Home Discount is separate from your tariff; check with your supplier if you rely on it.

• Prepay and smart-meter comparisons may show different deals, so compare using a payment method you can actually use.

• Northern Ireland has a separate energy market; this guide covers Great Britain.

How to switch

1. Check whether you are on a default tariff or a fixed deal, and any exit fee.

2. Find 12 months of electricity and gas kWh, or estimate carefully.

3. Compare deals with your postcode, meter type and payment method.

4. Rank them by yearly cost and check the standing charges and unit rates.

5. Check the cooling-off period and start date.

6. Switch only if the first-year total is lower after any exit fees and once any introductory credits are counted out.

Examples (illustrations, not quotes)

Flat on a Direct Debit variable tariff, about 1,800 kWh electricity and 8,000 kWh gas: your yearly bill will be below £1,723. Still compare: a deal with a low standing charge can matter more than a low unit rate.

Family home with typical use: use £1,723 as a rough guide. If a 12-month fix comes to £1,580 in total at your kWh with a modest exit fee, switching now makes sense.

Home with electric heating: dual-fuel comparisons may understate your electricity use. Use comparisons that take your real split, and consider two-rate tariffs if you can move use overnight.

Payment method and meters

Direct Debit, standard credit and prepay have different capped rates. If you change your payment method at the same time as your supplier, compare the new payment method too. A smart meter helps with accurate bills, but do not stay on a poor default tariff while you wait for one; use your best yearly usage and update it later.

What the January announcement changes

Ofgem is due to set the January to March 2027 cap on 25 November 2026. That matters if you stay on a default tariff. It does not change a fixed deal you have already taken: if you fix now, your rates stay the same for the contract term. Supplier forecasts for early 2027 are not Ofgem decisions.

Reading comparison results

Results often show a saving compared with the price cap. That saving only means something if it uses your payment method, region and usage. A result based on 2,500 kWh and 9,500 kWh will overstate the saving for a small flat and understate it for a large house. Check the unit rates, standing charges, exit fees and whether any credit is a one-off. If you have a heat pump or Economy 7, check the electricity rates separately.

Before you switch, note your tariff name, meter numbers (MPAN and MPRN) and payment method. When the welcome pack arrives, check the rates match what you agreed, and use the cooling-off period if they do not.

Renters and shared homes

If the energy account is in your name, you can usually switch even if you rent, subject to your tenancy. If the landlord’s name is on the bill, you cannot move the supply yourself. In shared houses, agree who pays the bill before anyone switches. If you have just moved in, check which tariff the previous occupants were on; it is often a default tariff, so compare straight away rather than waiting until winter.

Related guides: fixed vs variable tariffs · should I switch energy supplier, which also covers the rule that suppliers cannot charge exit fees in the last 49 days of a fixed deal.

FAQ

What is the Ofgem price cap for October to December 2026?

For 1 October to 31 December 2026, the typical dual-fuel bill paid by Direct Debit is £1,723 a year. Your bill depends on your usage, region and payment method.

Does the price cap apply if I am on a fixed tariff?

No. The cap limits default tariff unit rates and standing charges. Fixed deals sit outside it until they finish.

Should I switch energy now?

Switch if a deal beats your expected first-year cost on the default tariff after any exit fees. If leaving would cost more than you save, wait until your deal finishes.

Is £1,723 what I will pay?

Only if your usage matches Ofgem’s typical figures and you are on a default tariff paid by Direct Debit. Most homes are different.

When is the next price cap announced?

Ofgem is due to announce the January to March 2027 cap on 25 November 2026.

What are the standing charges for October to December 2026?

The Great Britain Direct Debit averages are 54.83p a day for electricity and 29.68p a day for gas. Check your region’s figures on Ofgem’s website.

Can businesses use these comparisons?

No. These comparisons are for homes. Business energy uses business contracts and needs a business quote.