The UK energy price cap increased by 4% from 1 October 2026, making way for possible price rises in the coming months. This has taken the typical annual dual-fuel bill from £1,663 to £1,723. Energy customers on a standard variable tariff face significant automatic price increases, and they would likely benefit from acting as soon as possible.
On a variable contract, your energy contract will track movements on the energy market, meaning when they increase, so will your monthly bills.
Energy Price Cap - What Action Can You Take?
Right now, markets are extremely volatile, and more increases are possible. Fortunately, customers on a variable contract can switch energy suppliers any time they like, and at zero charge. Therefore, it could be the ideal time to compare energy deals, possibly considering a fixed rate contract to protect against sudden price hikes.
What actually changed on 1 October
Price caps are reviewed every three months (January, April, July, and October) by the regulator, Ofgem, based on changes in wholesale energy costs.
If you pay by Direct Debit, electricity is now capped at an average of 26.32p per kWh, with a daily standing charge of 54.83p. Gas is capped at an average of 7.97p per kWh, with a daily standing charge of 29.68p. Both rates vary slightly by region and payment method, and are averages across England, Scotland, and Wales.
Alongside the cap change, the government has removed VAT from electricity bills between 1 October 2026 and 31 March 2027, which is reflected in the 0% VAT electricity rate above. Gas remains subject to the standard 5% VAT rate, also included in the gas figures. This only applies if you're on a standard variable (default) tariff, as if you've already fixed your rate, your prices are locked in for the length of your contract.
Why the cap rise is actually a switching trigger
The price cap increase is a trigger for households to act to avoid paying too much for their gas and electricity. Around 60% of energy contracts in the UK are standard variable tariffs, meaning millions of households will be exposed to potential price increases.
Many fixed energy deals are already priced below the cap rate, so by fixing now you can lock in these savings and make it easier to work out your future energy bills. If you stay on a variable tariff, prices will update automatically, with no pre-warning regarding the timing or the size of the increase. Changing to a fixed tariff now means you will pay the same rate regardless of what happens to the price cap in January. Compare Energy Deals
When Is The Next Price Cap Period
Ofgem's current price cap runs from 1 October to 31 December 2026, and the next review is for the January to March 2027 period, taking effect on 1 January 2027. As with previous reviews, this typically gives households only a few weeks' notice of what's coming next.
The October rise was driven by higher wholesale gas prices, and there's no guarantee the cap will fall in January. Some forecasts point to prices holding steady or edging up further. So if you're weighing up a fixed deal, comparing now means you can secure today's rates as opposed to waiting to find out what the next review brings.
How to Switch Energy Supplier
Check your current contract by logging into your supplier’s online portal. Determine what type of contract you’re on (standard variable or fixed) and note how much you have paid on previous bills.
Compare energy deals on CreditKnowledge to see if you can find an energy deal that is better for you than your current contract.
Follow the simple steps to make the switch, and your new supplier will handle the process for you, with no disruption to your energy supply and no need for you to get in touch with your previous supplier.
The switching process should take up to 5 working days, and you’ll have a 14-day cooling-off period if you change your mind.
If you're mid-contract with your current supplier, check for exit fees before switching, although these are usually waived if you're switching within 49 days of your contract ending.
Read Our Energy Switching Guide
Glossary:
Price cap: Ofgem's limit on the maximum unit rate and standing charge suppliers can charge on default tariffs. It caps prices, not your total bill.
Standard variable tariff (SVT): A supplier's default tariff, with prices that move in line with the Ofgem cap. Also called a "default" tariff.
Fixed tariff: A deal where your unit rates and standing charge stay the same for a set contract term, regardless of cap changes.
Standing charge: A fixed daily fee for staying connected to the gas or electricity network, charged regardless of usage.
Unit rate: The price per kWh (kilowatt hour) you pay for the energy you actually use.
Typical Domestic Consumption Value (TDCV): Ofgem's benchmark for "average" household energy use, used to calculate the headline price cap figure.
Cooling-off period: The 14-day window after signing up to a new energy deal in which you can cancel without penalty.
CreditKnowledge is a credit broker, not a lender.
Editorial Disclaimer: This content is provided for general informational purposes only and should not be considered advice. It is not intended to provide personalised recommendations or guarantees of any outcomes.
This content reflects general information at the time of publication and is not endorsed by any company. You should always consider your own circumstances and, where appropriate, seek independent advice before making decisions. Nothing in this content should be interpreted as a recommendation to take, or refrain from taking, any specific action.
Page Last Reviewed: 21/09/2026
